Amended and Restated Agreement
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WHEN RECORDED RETURN TO:
City Clerk’s Office
City of Glendale
5850 W. Glendale Avenue
Glendale, Arizona 85301
AMENDED AND RESTATED DEVELOPMENT AGREEMENT
CITY OF GLENDALE, ARIZONA,
an Arizona municipal corporation
AND
VAI RESORTS, LLC
an Arizona limited liability company
June ____, 2023
1
SPR 17590564.3
AMENDED AND RESTATED DEVELOPMENT AGREEMENT
THIS AMENDED AND RESTATED DEVELOPMENT AGREEMENT (the “Agreement”) is
made as of the _____ day of June, 2023, by and between the City of Glendale, Arizona, an Arizona
municipal corporation (“City”); and Vai Resorts, LLC, an Arizona limited liability company (“Company”).
City and Company are sometimes referred to herein collectively as the “Parties,” or individually as a
“Party.”
RECITALS
A.
The Company is the owner of approximately 60-acres of unimproved real property located
in the City of Glendale, Maricopa County (the “County”), Arizona, as more particularly described on
Exhibit A (the “Property”).
B.
The Company intends to develop the Property as a mixed-use destination containing
specialty retail, restaurants, hospitality, class A office space, and live entertainment venues, all surrounding
a public access artificial bathing lake (collectively, the “Project”).
C.
The Project complies with the purpose, intent and requirements of the City’s General Plan.
The Property is currently zoned Planned Area Development (“PAD”) in case ZON-19-13, approved on
January 28, 2020, under the City’s Zoning Ordinance, which zoning designation allows the uses
contemplated by this Agreement.
D.
The Parties acknowledge that the Project qualifies as a business expansion economic
development project; that the Project will assist in the creation and retention of jobs and will otherwise
improve and enhance the economic welfare of the residents of the City by timely expanding retail,
educational and civic uses and public amenities in the City, increasing access to goods and services,
increasing the City’s assessed property valuation, stimulating further economic development in the City,
constructing public infrastructure improvements, and generating additional sales tax revenues; that the
business expansion incentives agreed to by City in this Agreement will in fact serve legitimate economic
development purposes as authorized by A.R.S. §9-500.11; and will generally enhance the economic welfare
and recreation of the city’s citizens.
E.
As a condition of, and concurrent with, development of the Property, and subject to and in
accordance with the other provisions and requirements of this Agreement, Company intends and has the
ability to finance, construct and complete the Private Improvements, and to otherwise accomplish all of the
Company Obligations.
F.
City also acknowledges its intention and ability to perform the City Obligations described
in, and subject to the other provisions and requirements of, this Agreement.
G.
The Parties understand and acknowledge that this Agreement is a “Development
Agreement” within the meaning of, and entered into pursuant to the terms of, A.R.S. § 9-500.05, and that
the terms of this Agreement will constitute covenants running with the Property as more fully described in
this Agreement, and that, in accordance A.R.S. § 9-500.05, it shall be recorded against the interest of the
Company in the Property in the Office of the Maricopa County Recorder to give notice to all persons of its
existence and of the parties’ intent that the burdens and benefits contained herein be binding on and inure
to the benefit of the parties and all their successors in interest and assigns.
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H.
The Parties entered into that certain Development Agreement as of September 28, 2020
(the “Original Development Agreement”), which Original Development Agreement was recorded in the
Official Records of Maricopa County, Arizona as 2020-0919698.
I.
Concurrently with the recording of the Original Development Agreement, the Parties
recorded two Government Property Improvement Leases, both entered into effective as of September 28,
2020, which leases were recorded in the Official Records of Maricopa County, Arizona as 2020-0917703
and 2020-0917670 (collectively, the “Original GPLET Leases”).
J.
As of the date hereof, construction of the Project has not been completed and the Parties
prematurely filed the Original GPLET Leases.
K.
In order to unwind the premature filing of the Original GPLET Leases, and to terminate
the Original GPLET Leases, a Termination of Government Property Improvement Leases dated August 16,
2022 was recorded in the Official Records of the Maricopa County Recorder as #20220858028
L.
The Property is now owned by Vai Resorts, LLC, and the Parties have agreed to amend
and restate the Amended and Restated Development Agreement to reflect the ownership change and to
amend and update various provisions in said Agreement.
M.
City is entering into this Amended and Restated Development Agreement to implement
and to facilitate development of the Property consistent with the policies of the City and the City’s General
Plan.
AGREEMENT
Now, therefore, in consideration of the foregoing recitals and representations and the mutual
promises contained in this Agreement, the Parties agree as follows:
1.
DEFINITIONS.
In this Agreement (including the Recitals), unless a different meaning clearly appears from the
context:
(a)
“ADWR” means the Arizona Department of Water Resources.
(b)
“Agreement” means this Agreement, as amended and restated or supplemented in
writing by the Parties from time to time and includes all exhibits and schedules hereto. References to
Sections or Exhibits are to this Agreement unless otherwise qualified. The Recitals set forth in Paragraphs
A through H, inclusive, are incorporated into this Agreement by reference, and form a part of this
Agreement.
(c)
“Applicable Laws” means the federal, state, County and City statutes, codes
(including the City Charter), ordinances, rules, regulations, permit requirements, judgments, orders,
decrees, and other official written requirements and policies, any requirements or rules of common law and
any judicial or administrative interpretations thereof, which affect the subject matter of this Agreement or
apply to the development of the Property, all as they may be amended from time to time.
(d)
“Approved Plan” means as defined in Section 3.1(a).
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(e)
“A.R.S.” means the Arizona Revised Statutes as amended from time to time.
(f)
“City Code” means the Code of the City of Glendale, Arizona, as amended from
time to time.
(g)
“City Representative” means as defined in 9.1.
(h)
“Commencement of Construction” or “Commences Construction” means that
both of the following have occurred (i) the obtaining of permits by Company that are required to begin the
construction of vertical improvements on the Property, including the Lagoon, and (ii) the actual
commencement of physical construction operations on the Property in a manner necessary to achieve
Completion of Construction.
(i)
“Company” means Vai Resorts, LLC
(j)
“Company Representative” means as defined in 9.1.
(k)
“Completion of Construction” or “Completes Construction” means the first
date on which a temporary or final certificate of occupancy has been issued by the City for the first building
or amenity, including the Lagoon, after any applicable portion, segment or phase thereof has been
transferred to and accepted by City, such acceptance not in an unreasonable manner to be withheld,
conditioned or delayed.
(l)
“Component” means different portions of the Project as segmented by Company.
.
(m)
“County” means as defined in Recital A.
(n)
“Lake” means that certain Lagoon, more particularly described and depicted in
Exhibit C to the Lake GPLET Lease attached hereto, subject to the rules and regulations of ADWR.
(o)
“ Lake GPLET Lease” means the specimen lease attached hereto as Exhibit ____.
(p)
“ Lake Property” shall mean the real property described and depicted in the Lake
GPLET Lease.
(q)
“Custom Review Schedule” means as defined in Section 5.5.
(r)
“Default” or “Event of Default” means one or more of the events described in
Section 8.1 or Section 8.2; provided, however, that such events will not give rise to any remedy until effect
has been given to all Cure Periods and/or periods of Force Majeure provided for in this Agreement.
(s)
“Effective Date” means the date on which all the following events have occurred:
(i) this Agreement has been adopted and approved by the City Council, executed by the authorized
representatives of the City Council; (ii) this Agreement shall have been executed by the duly authorized
representatives of Company; and (iii) this Agreement shall have been recorded in the office of the Recorder
of the County.
(t)
“Fees” means as defined in Section 5.6.
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(u)
“Force Majeure” means and shall be limited to: an event which is beyond the
complete control of the Company and which causes a delay or failure to perform obligations hereunder,
including without limitation acts of God, earthquake, fire, explosion, war, civil insurrection, acts of the
public enemy, acts of civil or military authority, sabotage, terrorism, floods, lightning, hurricanes,
tornadoes, severe snow storms, utility disruption, pandemic, failure of a major supplier to perform its
obligation to the Company not arising out of or involving a failure toward such supplier by the Company,
strikes, lockouts or other labor disputes with respect to which the Company has not been determined by the
National Labor Relations Board to have engaged in any unfair labor practices.
(v)
“GPLET Lease” means as defined in Section 5.9(c).
(w)
“Lender” or “Lenders” means as defined in 10.23.
(x)
“Original Development Agreement” means as defined in Recital H.
(y)
“Original GPLET Leases” means as defined in Recital I.
(z)
“PAD” means as defined in Recital C.
(aa)
“Parking Spaces Lease Agreement” means the Parking Spaces Lease Agreement
between the City and ECL Glendale, LLC dated September 28, 2020, recorded in the Official Records of
the Maricopa County Recorder as Document No. 2020091759.
(bb)
“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, joint stock companies, joint venture associations, limited liability companies, limited
liability partnerships, trusts, land trusts, business trusts or other organizations, whether or not legal entities.
(cc)
“Private Improvements” means any improvements constructed at the Property
and the Lake as part of the Project, as generally depicted in the Site Plan and Development Narrative.
(dd)
“Project” means as defined in Recital B.
(ee)
“Property” means as defined in Recital A.
(ff)
“Purchase Price” means as defined in Section 5.7.
(gg)
“Term” means as defined in Section 2.3 hereof.
(hh)
“Zoning” means ZON-19-13 approved on January 28, 2020 under the City of
Glendale’s Zoning Ordinance, which zoning designation allows the uses contemplated by this Agreement.
2.
PARTIES, PURPOSE AND TERM OF THIS AGREEMENT.
2.1.
Parties to the Agreement. The Parties to this Agreement are City and the Company.
(a)
The City. City is the City of Glendale, Arizona, a municipal corporation
and a political subdivision of the State of Arizona, duly organized and validly existing under the laws of
the State of Arizona, exercising its governmental functions and powers.
SPR 17590564.3
(b)
The Company. The Company is a limited liability company duly
organized and validly existing under the laws of the State of Arizona.
2.2.
Purpose. The purpose of this Agreement is to provide for the development of the
Property in accordance with its terms; to provide for the Company Obligations; to provide for the
corresponding City Obligations, including the commitment to make all commercially reasonable efforts to
provide the water resources for the Project; and to address other matters related to the development of the
Project.
2.3.
Term. Notwithstanding anything in this Agreement to the contrary, the term of this
Agreement (“Term”) shall begin on the Effective Date and shall terminate twenty-five (25) years from the
date of execution of this Agreement, unless this Agreement is terminated sooner pursuant to any other
termination provision of this Agreement.
2.4. Survival of Certain Provisions. Notwithstanding the termination of this Agreement
as set forth in Section 2.3, the indemnity, duty to defend, and hold harmless obligations in Section 10.1
and elsewhere in this Agreement shall survive the expiration of this Agreement.
2.5. Parking Spaces Lease Agreement. The Parties acknowledge and agree that the
Company’s obligations under this Agreement include the Parking Spaces Lease Agreement dated
September 28, 2022 between the City of Glendale and ECL Glendale, LLC, and the Consent to Parking
Spaces Lease Agreement dated September 28, 2020. If conditioned by a city entitlement approval, the
Company shall construct additional parking facilities as needed.
3.
DEVELOPMENT PLAN APPROVAL AND REGULATION.
3.1.
Development Plans.
(a)
Development Plan Review and Approval. As the Project progresses and,
from time to time, the Site Plan, elevations, design plans, landscape plans and any other development plans
and items typically submitted to governmental agencies in conjunction with the development are subject to
approval by the City prior to issuance of building permits through the City’s standard design review process.
The City shall review Company’s site plans, elevations, landscape plans, design plans and any other
submittals promptly for approval according to the Custom Review Schedule (each an “Approved Plan”)
and Applicable Laws.
(b)
Cooperation in the Implementation of Approved Plans. Company and City
will work together throughout the pre-development and development stages to resolve any City comments
regarding implementation of Approved Plans.
3.2.
Development Regulation.
(a)
Applicable Laws. Company will comply with all Applicable Laws and
obtain all regulatory permits and approvals, including, but not limited to, permits or approval from ADWR,
ADOT, ADEQ, US EPA, Army Corps of Engineers and the US Bureau of Reclamation, in developing the
Property
(b)
Permit and Other Fees. Building permit, inspection, impact, development
and other similar fees for the development of the Property will be those in effect at the time of any
application or submission.
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4.
COMPANY OBLIGATIONS. Company hereby agrees to the Company Obligations as
follows:
4.1.
Development of the Project.
(a)
The Company will acquire, construct, furnish, equip, operate, maintain,
repair and replace all aspects, including each Component of the Project (including, without limitation, any
required infrastructure) as shown on the Site Plan (the “Site Plan”) attached hereto as Exhibit C. The
Company intends and agrees to operate the Project at the Property for a continuous period of at least twenty-
five (25) years from the Completion of Construction of each Component of the Project.
4.2. Property Rights Dedication. As required by this Agreement or each companion
GPLET Lease, the Company agrees that it will convey certain property rights to the City or third parties
(i) any right-of-way easements lying adjacent to the public roads within the Project, (ii) any necessary
drain easements or runoff waters to discharge into public detention basins and (iii) any necessary utility
easements. Any conveyance shall be a no cost to the City.
4.3.
Unless otherwise agreed to by the Parties, Completion of each Component of
Construction is anticipated to occur on or before November 7, 2024; provided, however, such
commencement and completion dates are subject to the extent delayed by Force Majeure. Furthermore, so
long as Company diligently pursues construction in a commercially reasonable manner, the Parties may
jointly agree in writing to extend the Completion Date. All costs and expenses, direct and indirect,
associated with the construction and operation of the Project shall be the sole responsibility of the Company.
4.4.
Use. The Company may use the Property for any legally permissible use, subject
to Zoning and permitting and the terms of this Agreement and the related GPLET Leases.
4.5.
Clawback. The Company shall have the right to terminate this Agreement, with or
without cause, prior to the Commencement of Construction of the Project. However, once Construction
Commences, Company shall complete all such construction in accordance with the Site Plan and any
applicable permit and/or approval as amended and approved by the Parties from time to time.
(a)
In the event the Company terminates the Agreement in accordance with
this section, then to the extent that the Company has commenced construction of the Project, the Company
shall pay to the City such amounts necessary to reimburse the City for Fees payable to the City which have
been waived pursuant to this Agreement.
5.
CITY OBLIGATIONS. If Company timely performs the applicable Company
Obligations, then City will perform the corresponding City Obligations as follows:
5.1.
City Council Action Requirement. City staff agrees to submit any necessary act or
document requiring City council approval to the City Council in a timely manner. The City and the
Company acknowledge, notwithstanding any language of this Agreement or any subsequent additional
document, that no act, requirement, payment or other agreed-upon action to be done or performed by the
City which would, under any federal, state or city constitution, statute, charter provision, ordinance or
regulation, require formal action, approval or concurrence by the City Council, will be required to be done
or performed by the City unless and until said formal City Council action has been taken and completed.
“Completion” under this provision means that such City Council action is no longer subject to referendum
action.
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5.2.
Development Rights. The City agrees that, for the term of this Agreement, the
Company and successor owners of the Property shall have a right to undertake and complete the
development and use of the Property in accordance with this Agreement, without being subject to
subsequent amendment to the City's Zoning Ordinance except future ordinances, rules, regulations and
official policies of City enacted as necessary to comply with mandatory requirements of state and federal
laws or regulations whose primary purpose is to alleviate legitimate threats to public health or public safety,
provided that in the event any such mandatory requirement prevents or precludes compliance with this
Agreement such affected provision(s) of this Agreement shall be modified as may be necessary to achieve
the minimum mandatory requirements of such state laws or regulations. For purposes of this Agreement,
the Development Plan and PAD zoning for the Property are deemed vested for the term of this Agreement.
Nothing herein affects the vesting of the Development Plan and PAD zoning for the Property as a matter
of common law following termination of this Agreement. During the term of this Agreement, unless
mutually agreed by the City and the Company’s or its designated assignee, development of the Property
shall be governed by the Site Plan, the City Zoning Ordinance, and PAD zoning in effect at the time of
approval of this Agreement.
5.3.
Rezoning and Development Agreement Amendments. The City shall not initiate
any changes or modifications to the current PAD zoning that may adversely affect the Company’s use of
the Property, except at the request of the Company. The City shall not initiate any changes or modifications
to the design review approval for the Property, once such approval is final, except at the request of the
Company. Any such request by the Company for a change will be processed in the manner then set forth in
the City’s Zoning Ordinance.
5.4.
Approval of Development Plan. The City acknowledges and agrees that the Site
Plan is in substantial conformance with the PAD zoning, and that the Property may be developed in
substantial conformance with the Site Plan without amending the PAD zoning.
5.5.
Expedited City Review. The City shall design a customized plan review and
permitting schedule for the Company that will facilitate the phasing off-plan reviews and permitting to
accelerate construction of the Project (the “Custom Review Schedule”).
5.6.
Fee Waiver. Company will pay any City fees related to the design and construction
of or the issuance of a certificate of occupancy for the Project, including, permits, reviews (which shall only
be charged at ordinary rates and without premium even if performed after hours or on weekends),
inspections (including expedited and after hours/weekends), code modification/formal interpretations,
record retention, planning, barricade, and other fees listed in the City of Glendale Community Development
Fee Schedule (collectively, “Fees”). The City agrees to waive any such Fees in an amount not to exceed
One Million Dollars ($1,000,000) in exchange for Company’s performance of its obligations under this
Agreement. The Company acknowledges the Fees do not include development impact fees, and the
Company agrees it will pay all development impact fees related to the Project.
5.7.
Purchase of the Property by City. Upon Completion of Construction, City shall
acquire each Project Component subject to a GPLET Lease from the Company, in the amount of Ten and
00/100 Dollars ($10.00), plus applicable closing costs (the “Purchase Price”). The City and the Company
shall inter into a sale agreement which will, among other matters, set forth the time period that such sale
and purchase will occur, the amount of earnest money, if any, applied against the purchase price at the close
of escrow, the prorations and adjustments at close of escrow, the prorations and adjustments against the
purchase price, the identification and the escrow agent and conditions to closing. After the termination of
each GPLET Lease, the Company shall purchase the Project from City the at the original purchase price.
The sale, if any, of the Property and any improvements shall be governed by the Glendale Charter and City
Code in effect on the date of this Agreement, including but not limited to Section 2-166 and Section 2-167.
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5.8.
Water Commitment. City agrees that as soon as practicable after the Effective
Date, that the City will undertake all commercially reasonable efforts to provide water resources in a
quantity sufficient for the operation of the Project and to fill the Lake. Any costs or expenses associated
with any permits required for the City to provide water resources shall be paid for by Company.
Furthermore, the provision of water shall be subject to all Applicable Laws in addition to any City, County,
State or Federal water conservation plans that may be instituted city-wide during the term of this
Agreement.
5.9.
Live Events. The City agrees that live events, including, without limitation,
shows, festivals, concerts, sales, corporate events, and other indoor/or outdoor public gatherings
(the “Live Events”) are permitted subject to an annual noise assessment and noise management
plan approved by the City. In the event City receives what in its reasonable discretion deems a
significant amount of citizen complaints related to Live Events, City may request that Company
modify its noise assessment and noise management plan to address such complaints, and Company
will make all necessary and reasonable adjustments in response to such request.
5.10. Government Property Lease Excise Tax.
(a)
Upon request by Company at any time following ninety percent (90%)
completion of each Component of the Project, the City and Company will enter into a “Government
Property Improvements Lease” in the form attached as Exhibit B for each such Component of the Project
(“GPLET Lease”), whereby Company will convey that portion of the Property comprising the applicable
Component of the Project, to the City by special warranty deed free and clear of or superior in right to all
financial liens and encumbrances, the property so conveyed will constitute government property
improvements pursuant to A.R.S. § 42-6201(2), the City shall constitute a “government lessor” under
A.R.S. § 42-6201(1), and Company will constitute a “prime lessee” under A.R.S. § 42-6201(4). The Parties
acknowledge that the initial conveyance of a Component of the Project will be or will include the Lake
which conveyance shall conform to the requirements set forth herein. Notwithstanding a termination of the
Lake GPLET Lease, at no time will the City become responsible for the operation of the Lake.
(b)
Upon request by Company at any time following ninety percent (90%)
completion of each Component of the Project, the City and Company will enter into a “Government
Property Improvements Lease” in the form attached as Exhibit B (“GPLET Lease”) for such applicable
Component, to the City by special warranty deed free and clear of all unpermitted financial liens other than
subordinated encumbrances, the property so conveyed will constitute government property improvements
pursuant to A.R.S. § 42-6201(2), the City shall constitute a “government lessor” under A.R.S. § 42-6201(1),
and Company will constitute a “prime lessee” under A.R.S. § 42-6201(4).
(c)
Each GPLET Lease shall be referred to as a “GPLET Lease” and all the
GPLET Leases shall be referred to herein as the “GPLET Leases”.
(d)
The term of each GPLET Lease shall be Twenty-Five (25) years, with an
annual rental payment due from the Company to the City in an amount of One-Hundred Twenty and 00/100
Dollars ($120.00).
(e)
Prior to the Parties’ entry into any GPLET Lease, the Company shall
provide an appropriately detailed description of the applicable Component of the Project, sufficient to
allocate square footage of the areas within the applicable Component of the Project used primarily for
SPR 17590564.3
athletic, recreational, entertainment, artistic, or cultural activities. Company shall be responsible for
continuous compliance and shall immediately notify the City of any changes to the allocation of square
footage or changes to the actual use of a particular allocation within any Component of the Project.
Company shall be responsible for curing any deficiencies or negative determinations, regarding allocation
of areas or actual uses that are determined as not being used primarily for athletic, recreational,
entertainment, artistic, or cultural activities.
(f)
As required by A.R.S. § 42-620, notice is given hereunder and shall be
given under each GPLET Lease, that (i) the Company is responsible for payment of the tax liability under
the provisions of the GPLET, and (ii) failure by the Company to pay the tax liability under the GPLET after
notice and an opportunity to cure is an Event of the Default that could result in divesting the Company of
any interest in or right of occupancy to the Project.
6.
CITY REPRESENTATIONS. City represents and warrants to Company that:
6.1.
City has the full right, power and authority to enter into this Agreement and
perform this Agreement and each of the obligations and undertakings of City under this Agreement, and
City’s execution, delivery and performance of this Agreement have been duly authorized and agreed to in
compliance with the requirements of the City Code.
6.2.
All consents and approvals necessary to the execution, delivery and performance
of this Agreement by City have been obtained, and no further action needs to be taken in connection with
City’s execution, delivery and performance of this Agreement.
6.3.
As of the date of this Agreement, City knows of no litigation, proceeding,
initiative, referendum, investigation or threat of any of the same contesting the powers of City or its officials
with respect to this Agreement that has not been disclosed in writing to Company.
6.4.
The execution, delivery and performance of this Agreement by City is not
prohibited by, and does not conflict with, any other agreements, instruments or judgments or decrees to
which City is a party or is otherwise subject.
6.5.
No member, official or employee of the City has had any direct or indirect interest
in this Agreement and has not participated in any decision relating to the Agreement that is prohibited by
law. The Parties acknowledge that this Agreement is subject to cancellation pursuant to the provisions of
A.R.S. §38-511.
6.6.
City has been assisted by counsel of its own choosing in connection with the
preparation and execution of this Agreement.
7.
COMPANY REPRESENTATIONS. Company represents and warrants to City that:
7.1.
Company has the full right, power and authority to enter into and perform this
Agreement and each of the obligations and undertakings of Company under this Agreement, and the
execution, delivery and performance of this Agreement by Company has been duly authorized and agreed
to in compliance with the Company’s organizational documents.
7.2.
All consents and approvals necessary to Company’s execution, delivery and
performance of this Agreement have been obtained, and no further action needs to be taken in connection
with Company’s execution, delivery and performance of this Agreement.
SPR 17590564.3
7.3.
As of the date of this Agreement, Company knows of no litigation, proceeding or
investigation pending or threatened against or affecting Company contesting the validity or enforceability
of this Agreement or Company’s performance under this Agreement.
7.4.
The execution, delivery and performance of this Agreement by Company is not
prohibited by, and does not conflict with, Company’s organizational documents or any other agreements,
instruments, judgments or decrees to which Company is a party or to which Company is otherwise subject.
7.5.
Company 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 and any licensed
real estate broker retained by the Company.
7.6.
Company has been assisted by counsel of its own choosing in connection with the
preparation and execution of this Agreement.
7.7.
Company has adequate financing and financial resources to complete the Project
and comply with all of its obligations contained herein and each companion GPLET Lease.
8.
EVENTS OF DEFAULT; REMEDIES.
8.1.
Events of Default by Company. “Default” by Company under this Agreement will
mean one or more of the following:
(a)
Any representation or warranty made in this Agreement by Company was
both material and materially inaccurate when made;
(b)
Company fails to observe or perform any covenant, obligation or
agreement required of it under this Agreement after notice, after the expiration of any applicable Cure
Period, and after the opportunity to cure as otherwise set forth in each GPLET Lease or as set forth in this
Agreement;
(c)
Company fails to maintain adequate financial or financial resources to
complete the Project or meet its obligations as contained herein and each companion GPLET Lease.
8.2.
Events of Default by City. Default or an Event of Default by City under this
Agreement will mean one or more of the following:
(a)
Any representation or warranty made in this Agreement by City was both
material and materially inaccurate when made;
(b)
City fails to observe or perform any covenant, obligation or agreement
required of it under this Agreement after notice, after the expiration of any applicable Cure Period, and after
the opportunity to cure as otherwise set forth in each GPLET Lease or as set forth in this Agreement.
8.3.
Cure Periods; Notice and Cure. Upon the occurrence of a Default by any Party,
such Party will, upon written notice from the other Party, proceed promptly to cure or remedy such Default
and, in any event, such Default must be cured within thirty (30) days after receipt of such notice or it shall
become an Event of Default; or, if such Default is of a nature that is not capable of being cured within thirty
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(30) days, the cure must be commenced within such period and diligently pursued to completion, but not
to exceed ninety (90) days in total unless otherwise agreed between the Parties (each such period shall be
deemed a “Cure Period”).
8.4.
Remedies for Default. If an Event of Default should occur under any of the
obligations of the City or the Company as provided in this Agreement, each party shall be entitled to
exercise only those rights or remedies as are made available pursuant to the terms of this Agreement,
including without limitation specific performance, except as this Agreement, any document executed in
connection therewith, including the GPLET Leases may specifically limit such remedies. Notwithstanding
the foregoing, each party waives any claim such party may have for incidental or consequential damages
arising out of a failure of performance of the other party under this Agreement.
8.5.
Delays; Waivers. Except as otherwise expressly provided in this Agreement, any
delay by any Party in asserting any right or remedy under this Agreement will not operate as a waiver of
any such rights or limit such rights in any way; and any waiver in fact made by such Party with respect to
any Default by the other Party will not be considered as a waiver of rights with respect to any other Default
by the performing Party or with respect to the particular Default except to the extent specifically waived in
writing. It is the intent of the Parties that this provision will enable each Party to avoid the risk of being
limited in the exercise of any right or remedy provided in this Agreement by waiver, laches or otherwise at
a time when it may still hope to resolve the problems created by the Default involved.
8.6.
Rights and Remedies Cumulative. Except where exclusive and/or sole remedies
are expressly provided herein, the rights and remedies of the Parties are cumulative, and the exercise by
either Party of any one or more of such rights will not preclude the exercise by it, at the same or different
times, of any other right or remedy, allowed and enumerated under this Agreement for any other Event of
Default by the other Party.
8.7.
Informal Resolution and Mediation.
(a)
If there is a dispute under this Agreement, the Parties agree that the City
Representative and Company Representative shall promptly meet (not more than five (5) City of Glendale
business days after notice) to resolve the dispute. If these representatives are unable to resolve the dispute,
Company shall designate a person that has final authority to resolve the dispute on behalf of the Company
and this person shall meet with the City’s City Manager to seek resolution of the dispute.
(b)
If there is a dispute that the Parties cannot resolve in the manner described
in Section 8.8(a) above, 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. Company may send a notice of claim to the City and/or file a lawsuit or take
other action against the City that Company deems necessary in order to preserve its rights during the
pendency of the ninety (90) day moratorium on litigation. The mediation shall not be subject to the
Commercial Mediation Rules of the American Arbitration Association. The matter in dispute shall be
submitted to a mediator mutually selected by Company and City. If the Parties cannot agree upon the
selection of a mediator within ten (10) days, then within five (5) days thereafter, City and Company 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 property, commercial transactions or complex contracts. The
cost of any such mediation shall be divided equally between City and Company. The results of the
mediation shall be nonbinding, with any Party free to initiate litigation upon the earlier of the conclusion
of the mediation or of the ninety (90) day moratorium on litigation. The mediation shall be completed in
SPR 17590564.3
one day (or less) and shall be confidential, private, and otherwise governed by the provisions of A.R.S. §12-
2238.
9.
DESIGNATED REPRESENTATIVES AND COOPERATION.
9.1.
Representatives. To further the cooperation of the Parties in implementing this
Agreement, City and Company each will designate and appoint a representative to act as a liaison between
City and its various departments and Company. The initial representative for City will be Kevin Phelps,
City Manager (the “City Representative”), and the initial representative for Company will be Grant Fisher,
President of Company, or such other individual as identified by Company from time to time (the “Company
Representative”). The City Representative and the Company Representative 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.
9.2.
Continued Cooperation. City and Company agree they will maintain an ongoing
relationship and use good faith and reasonable efforts to coordinate development of the Property and the
Project and methods to mitigate any potential impacts on each other’s operations. Such coordination will
include but not be limited to: Representatives of City and Company will meet regularly to discuss
development progress, operational build-out and utility service issues such as planned service interruptions.
Additionally, the City will endeavor to provide reasonable prior notice to Company of any planned water
service interruptions, including the expected time period of the planned water service interruptions.
10.
MISCELLANEOUS PROVISIONS.
10.1. Indemnification. Each of the Parties shall indemnify, protect, defend and hold
harmless the other from and against any and all claims, costs, damages and liabilities (including attorneys’
fees and costs) arising from any breach by such party of any of the representations and warranties contained
herein, and shall give prompt notice to the other Party upon receipt of written notice or obtaining actual
knowledge of any pending or threatened claim or litigation that may be subject to the Parties’ indemnity
obligations under this Agreement.
10.2. Defense of Agreement. In the event of any Third-Party challenge to the validity
and enforceability of this Agreement or any proceeding or litigation arising from its terms that names City
or Company as a party or which challenges the authority of the Parties to enter into or perform any of its
obligations hereunder, the Parties may jointly cooperate to defend such challenge. In the event either Party
does not desire to participate in such defense, such party shall cooperate in a commercially reasonable
manner in the event the other Party desires to mount such a defense at its sole cost and expense. So long
as one Party is actively defending, the remaining Party shall not terminate this Agreement.
10.3. Governing Law; Choice of Forum. This Agreement will be deemed to be made
under, will be construed in accordance with, and will be governed by the internal, substantive laws of the
State of Arizona (without reference to conflict of law principles). Any action brought to interpret, enforce
or construe any provision of this Agreement must be commenced and maintained in the United States
District Court for the District of Arizona (or, as may be appropriate, in the Justice Courts of the County, or
in the Superior Court of the State of Arizona in and for the County of Maricopa, if, but only if, the District
Court lacks or declines jurisdiction over such action). The Parties irrevocably consent to jurisdiction and
venue in such courts for such purposes and agree not to seek transfer or removal of any action commenced
in accordance with the terms of this Section.
10.4. Restrictions on Assignment and Transfer.
SPR 17590564.3
(a)
Restriction on Transfers. The Company represents and agrees that its
undertakings pursuant to this Agreement are and will be for the purpose of development of the Project on
the Property and not for speculation in landholding. The Company further recognizes that the qualifications
of its principals are of particular concern to the City and that it is because of such qualifications and identity
that the City is entering into this Agreement. In recognition of the Company’s expertise and experience, the
Company may not assign or transfer its rights under this Agreement to any other person or entity, except
for the Company’s Lender or a subsidiary or affiliate of Company, without the prior express written consent
of the City, which consent may be withheld in the City’s sole and absolute discretion. Notwithstanding City
consent, any such assignment shall not relieve the Company of any obligations hereunder. Moreover, no
voluntary or involuntary successor-in-interest to the Company may acquire any rights under this Agreement
except as expressly set forth in this Section 10.4. Notwithstanding the foregoing, the Company shall be
entitled to freely transfer and/or assign the membership interests of the Company without the written
consent of the City.
(b)
Transfers by City. Except as expressly set forth herein, City’s rights and
obligations under this Agreement will be non-assignable and non-transferable, without the prior express
written consent of Company, which consent may be given or withheld in Company’s sole and unfettered
discretion.
10.5. Limited Severability. City and Company each believes that the execution, delivery
and performance of this Agreement comply with all Applicable Laws. However, in the unlikely event that
any provision of this Agreement is declared void or unenforceable, such provision will be deemed severed
from this Agreement and this Agreement will otherwise remain in full force and effect; provided that this
Agreement will retroactively be deemed reformed to the extent reasonably possible in such a manner so
that the reformed agreement (and any related agreements effective as of the same date) provide essentially
the same rights and benefits (economic and otherwise) to the Parties as if such severance and reformation
were not required. The Parties further agree, in such circumstances, to do all acts and to execute all
amendments, instruments and consents necessary to accomplish and to give effect to the purposes of this
Agreement, as reformed.
10.6. Construction. The terms and provisions of this Agreement represent the results of
negotiations between the Parties, each of which has been or has had the opportunity to be represented by
counsel of its own choosing, and none of which has acted under any duress or compulsion, whether legal,
economic or otherwise. Consequently, the terms and provisions of this Agreement will be interpreted and
construed in accordance with their usual and customary meanings, and the Parties each hereby waive the
application of any rule of law which would otherwise be applicable in connection with the interpretation
and construction of this Agreement that ambiguous or conflicting terms or provisions contained in this
Agreement will be interpreted or construed against the Party who prepared or whose attorney prepared the
executed Agreement or any earlier draft of the same.
10.7. Notices. Any notice, request, demand, statement, or consent herein required or
permitted to be given by either Party to the other in this Lease (each, a “Notice”), must be in writing signed
by or on behalf of the party giving the notice and addressed to the other at the address as set forth below:
If to the City:
The City of Glendale
5850 West Glendale Avenue
Glendale, Arizona 85301
Attention: Kevin Phelps, City Manager
kphelps@glendaleaz.com
With a required copy to:
The City of Glendale
SPR 17590564.3
5850 W. Glendale Avenue,
Glendale, Arizona 85301
Attention: Michael Bailey, City Attorney
mbailey@glendaleaz.com
If to the Company:
Vai Resorts, LLC
1302 West Drivers Way
Tempe, AZ 85284
Attention: Grant Fisher
gfisher@fisherind.com
With a required copy to:
Fisher Sand & Gravel Co.
1302 West Drivers Way
Tempe, AZ 85284
Attn: Timothy A. Priebe
tpriebe@fisherind.com
Each party may by notice in writing change its address for the purpose of this Agreement, which
address shall thereafter be used in place of the former address. Each notice, demand, request, or
communication which shall be mailed to any of the aforesaid shall be deemed sufficiently given, served, or
sent for all purposes hereunder (i) two (2) business days after deposit with the United States Postal Service
as registered or certified mail, postage prepaid and return receipt requested, (ii) upon personal delivery, or
(iii) one (1) business day after deposit with any recognized commercial air courier or express service for
next business day delivery.
10.8. No Agency Created. Nothing contained in this Agreement creates any partnership,
joint venture or agency relationship between the City and the Company. 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.
10.9. Time of Essence. Time is of the essence of this Agreement and each provision
hereof.
10.10. Section Headings. The Section headings contained in this Agreement are for
convenience of reference only and are not intended to define or limit the scope of any provision of this
Agreement.
10.11. Attorneys’ Fees and Costs. In the event either Party commences litigation for the
judicial interpretation, enforcement, termination, cancellation or rescission hereof, or for damages for the
breach hereof, then, in addition to any or all other relief awarded in such litigation, the prevailing Party
therein shall be entitled to a judgment against the other for an amount equal to reasonable attorneys’ fees
and court and other costs incurred.
10.12. Waiver. Without limiting the provisions of Section 8.5 of this Agreement, the
Parties agree that neither the failure nor the delay of any Party to exercise any right, remedy, power or
privilege under this Agreement will operate as a waiver of such right, remedy, power or privilege, nor will
any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise
of the same or of any other right, remedy, power or privilege, nor will any waiver of any right, remedy,
SPR 17590564.3
power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver will be effective unless it is in writing and is
signed by the Party asserted to have granted such waiver. Nothing herein shall constitute a waiver of the
City’s police powers or amount to an unlawful delegation of governmental authority by the City.
10.13. Third Party Beneficiaries. No person or entity will be a third-party beneficiary to
this Agreement, except for permitted transferees, successors, assignees, or lenders to the extent that they
assume or succeed to the rights and/or obligations of Company under this Agreement, and except that the
indemnified Parties referred to in the indemnification provisions of Section 10.1 (or elsewhere in this
Agreement) will be third party beneficiaries of such indemnification provisions.
10.14. Exhibits. Without limiting the provisions of Section 1 of this Agreement, the
Parties agree that all references to this Agreement include all Exhibits designated in and attached to this
Agreement, such Exhibits being incorporated into and made an integral part of this Agreement for all
purposes.
10.15. Integration. Except as expressly provided herein, this Agreement constitutes the
entire agreement between the Parties with respect to the subject matters hereof and supersedes any prior
agreement, understanding, negotiation or representation regarding the subject matters covered by this
Agreement.
10.16. Further Assurances. Each Party agrees to perform such other and further acts and
to execute and deliver such additional agreements, documents, affidavits, certifications, acknowledgments
and instruments as any other Party may reasonably require to consummate, evidence, confirm or carry out
the matters contemplated by this Agreement or confirm the status of (a) this Agreement as in full force and
effect and (b) the performance of the obligations hereunder at any time during its Term. The Parties will
take all actions necessary to implement, evidence, and enforce this Agreement.
10.17. Business Days. If the last day of any time period stated in this Agreement or the
date on which any obligation to be performed under this Agreement falls on a Friday, Saturday, Sunday, a
legal holiday, or a day on which national banking associations are not open for general banking business,
then the duration of such time period or the date of performance, as applicable, will be extended so that it
will end on the next succeeding day which is not a Friday, Saturday, Sunday, a legal holiday, or a day on
which national banking associations are not open for general banking business.
10.18. Consents and Approvals. Wherever this Agreement requires or permits the
consent or approval of a Party to any act, document, use or other matter, such consent or approval will be
given or denied by such Party in its reasonable discretion, not in an unreasonable manner to be conditioned
or delayed, unless this Agreement expressly provides otherwise. .
10.19. Covenants Running With Land; Inurement. The covenants, conditions, terms and
provisions of this Agreement relating to use of the Property will run with the Property and will be binding
upon, and will inure to the benefit of, the Parties and their respective permitted successors and assigns with
respect to such Property. Wherever the term “Party” or the name of any particular Party is used in this
Agreement such term will include any such Party’s permitted successors and assigns.
10.20. Recordation. Within ten (10) days after this Agreement has been executed by the
Parties, City will cause this Agreement to be recorded in the Official Records of the County.
10.21. Amendment. No change or addition is to be made to this Agreement except by
written amendment executed by City and Company. Within ten (10) days after any amendment to this
SPR 17590564.3
Agreement has been signed by the Parties, such amendment will be recorded in the Official Records of the
County. Upon amendment of this Agreement as established herein, references to “Agreement” or
“Development Agreement” will mean this Agreement as amended. If, after the effective date of any
amendment(s), the Parties find it necessary to refer to this Agreement in its original, unamended form, they
will refer to it as the “Original Development Agreement.” When the Parties mean to refer to any specific
amendment to the Agreement which amendment is unmodified by any subsequent amendments, the Parties
will refer to it by the number of the amendment as well as its effective date.
10.22. Good Faith of Parties. Except where any matter is expressly stated to be in the
sole discretion of a Party, in performance of this Agreement or in considering any requested extension of
time, the Parties agree that each will act in good faith and will not act unreasonably, arbitrarily or
capriciously and will not unreasonably withhold, delay or condition any requested approval,
acknowledgment or consent.
10.23. Rights of Lenders.
(a)
City is aware that Company may obtain refinancing or refinancings for
acquisition, development and/or construction of the real property and Private Improvements (and
appurtenant rights of the city) to be constructed on the Property, in whole or in part, from time to time, by
one or more Third Parties (individually a “Lender,” and collectively the “Lenders”).
(b)
Company shall have the right at any time, and as often as it desires, to
finance or refinance the acquisition, development and/or construction of the real property and Private
Improvements (and appurtenant rights of the City) to be constructed on the Property, in whole or in part,
and to secure such financing with a lien or liens against the Property; provided, however, that all such liens
must be released or subordinated in their entirety (or amended to encumber only the Company’s leasehold
interest) prior to any transfer or conveyance of the Property and the Private Improvements to City in
connection with each GPLET Lease.
(c)
Notwithstanding any other provision of this Agreement, Company may
collaterally assign all or part of its rights and duties under this Agreement as security to any Lender without
such Lender assuming the obligations of Company under this Agreement, but without releasing Company
from its obligations under this Agreement.
10.24. Nonliability of City Employees, Officials, Etc., and of Employees, Shareholders,
Members and Partners, Etc. of Company. No City Council member, official, representative, agent, attorney
or employee of City will be personally liable to any of the other Parties hereto, or to any successor in interest
to any of the other Parties, in the event of any Default or breach by City or for any amount which may
become due to any of the other Parties or their successors, or with respect to any obligation of City under
the terms of this Agreement. Notwithstanding anything contained in this Agreement to the contrary, the
liability of Company under this Agreement will be limited solely to the assets of Company and will not
extend to or be enforceable against: (i) the individual assets of any of the individuals or entities who are
shareholders, members, managers constituent partners, officers or directors of the Company or any of its
constituent equity owners; (ii) the shareholders, members or managers or constituent equity owners of
Company; or (iii) officers of Company.
10.25. WAIVER OF JURY TRIAL. THE CITY AND THE COMPANY HEREBY
KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING,
COUNTERCLAIM OR DEFENSE BASED ON THIS AGREEMENT, OR ARISING OUT OF, UNDER
OR IN ANY WAY CONNECTED TO THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
SPR 17590564.3
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY
PARTY HERETO RELATING TO THIS AGREEMENT.
10.26. Amendment and Restatement of Original Development Agreement. The
Original Development Agreement, as amended by the Amended and Restated Development Agreement is
hereby amended in its entirety and restated herein.
SPR 17590564.3
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth
above.
CITY:
CITY OF GLENDALE, ARIZONA, an Arizona
municipal corporation
By:
Its:
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
City Attorney
STATE OF ARIZONA
)
) ss.
COUNTY OF MARICOPA
)
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by
______________________ the ______________ of the City of Glendale, Arizona, an Arizona municipal
corporation, who acknowledged that he/she signed the foregoing instrument on behalf of the City.
Notary Public
My Commission Expires:
SPR 17590564.3
COMPANY:
VAI RESORTS, LLC, a Arizona limited liability
company
By:
Grant Fisher, President,
STATE OF ARIZONA
)
) ss.
COUNTY OF MARICOPA
)
The foregoing instrument was acknowledged before me this ____ day of June, 2023, by Grant
Fisher, President of the Company named in the foregoing Development Agreement, who acknowledged
that he signed the foregoing instrument on behalf of the Company.
Notary Public
My Commission Expires:
SPR 17590564.3
EXHIBIT A TO DEVELOPMENT AGREEMENT
LEGAL DESCRIPTION
SPR 17590564.3
EXHIBIT B TO DEVELOPMENT AGREEMENT
GOVERNMENT PROPERTY IMPROVEMENTS LEASE – SPECIMEN FORM
EXHIBIT C TO DEVELOPMENT AGREEMENT
SITE PLAN