Development Agreement - Specht

When recorded, return to:

Chandler City Attorney’s Office
City of Chandler

Post Office Box 4008, Mail Stop 602
Chandler, Arizona 85244

Attn.: Thomas Allen

DEVELOPMENT AGREEMENT

CITY OF CHANDLER,
an Arizona municipal corporation

and

SPECHT COMMERCIAL PROPERTIES, LLC
an Arizona limited liability company

Approved by the Chandler City Council on , 2021

DEVELOPMENT AGREEMENT

This development agreement (the “Agreement”) is entered into as of the _ day of

, 2021, by and between the City of Chandler, an Arizona municipal corporation (“City”),

and Specht Commercial Properties, LLC, an Arizona limited liability company (“Developer”).

City and Developer are sometimes referred to in this Agreement collectively as the “Parties,” or
individually as a “Party.”

RECITALS

A. City owns real property located at 51 East Boston Street, within the City of
Chandler, Arizona (the “Property”), totaling approximately 3,000 square feet and legally
described in the attached Exhibit A. the Property includes a 2,000 square foot one-story building.

B. City desires to have the Property privately developed and re-purposed for a use that
will complement the nearby retail, restaurant, and commercial uses in the City’s downtown area.

C. In response to a request for proposals (“RFP”) issued by City in December 2020,
Developer submitted a written proposal to purchase and redevelop the Property for entertainment
purposes, consistent with the existing zoning for the Property. Developer’s proposal was selected
by City as the winning proposal.

D. City and Developer acknowledge that significant benefits will accrue from the
redevelopment and re-use of the Property, including, but not limited to, creation of jobs, increased
tax revenues, the stimulation of further economic development, and the provision of additional
recreational amenities within the downtown area of Chandler.

E. City finds that this Agreement is consistent with Chandler’s general plan, as defined
in A.R.S. § 9-461, applicable to the Property on the date this Agreement is executed.

F, This Agreement is intended to set forth certain obligations of the Parties with
respect to contemplated future improvements of the Property. The Parties intend for this
Agreement to meet the requirements of A.R.S. § 9-500.05, and that the terms of this Agreement
shall constitute covenants running with the Property, as more fully described in this Agreement.

AGREEMENT.

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual promises
and covenants set forth herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

SECTION 2. EFFECTIVE DATE & TERM.

2.1. Effective Date. This Agreement shall be effective as of the date that it is executed
by the representative of the last Party to sign it and its recordation in the Official Records of
Maricopa County, Arizona, in accordance with the requirement of A.R.S. § 9-500.05.

2.1. Term. The term of this Agreement (“Term”) shall be five (5) years from the
Effective Date.

SECTION 3. PURCHASE AND SALE OF THE PROPERTY.

3.1. Purchase & Sale. Within ten (10) days after the Effective Date of this Agreement,
the Parties shall enter into a purchase agreement for the Property, which shall substantially be as
set out in attached Exhibit B (the “Purchase Agreement”), pursuant to which Developer shall
purchase the Property from City for the price of four hundred and sixty thousand dollars
($460,000). If Developer is unable to secure financing and close escrow by 5:00PM on [date], this
Agreement shall terminate and Developer shall forfeit its rights under this Agreement and have no
recourse against City.

SECTION 4. COMPLETION OF DEVELOPMENT.

4.1 Developer shall complete all improvements and begin operation of its live comedy
entertainment venue at the Property no later than December 31, 2021.

SECTION 5. LIMITATIONS ON USE OF THE PROPERTY.

5.1. Live Entertainment Uses Only. Developer must operate a live comedy
entertainment venue in substantially the format proposed in Developer’s submission to City’s RFP
for the entire Term of the Agreement. This may include, but is not limited to, live performances,
classes, training, and sales of food, beverages, and merchandise incidental to live comedy
entertainment.

SECTION 6. INDEMNITY; RISK OF LOSS.

6.1. Indemnity by Developer. Developer shall pay, defend, indemnify and hold
harmless City and its City Council members, officers and employees for, from and against all
claims, demands, fines, penalties, costs, expenses, damages, losses, obligations, judgments,
liabilities, and suits (including attorneys’ fees, experts’ fees and court costs associated therewith)
which arise from or relate in any way to any act or omission by Developer, or its employees,
contractors, subcontractors, agents or representatives, undertaken in fulfillment of Developer’s
obligations under this Agreement; provided, however, that the provisions of this paragraph 5.1
shall not apply to loss or damage or claims which are attributable solely to acts or omissions of
City, its agents, employees, contractors, subcontractors or representatives, and Developer shall
have no defense obligation in any instance in which a claim is asserted based solely upon an act
or omission of City, it employees, contractors, subcontractors, agents or representatives. The
foregoing indemnity obligations of Developer shall survive the expiration or termination of this
Agreement for a period equal to the applicable statute of limitations period.

6.2. Risk of Loss. Developer assumes the risk of any and all loss, damage or claims to
any portion of the improvements to be constructed on the Property.

SECTION 7. EVENTS OF DEFAULT; REMEDIES.

7.1. Events of Default. It shall be a default hereunder if either Party fails to perform
any of its obligations hereunder and such failure continues for a period of thirty (30) days after
written notice from the non-defaulting Party specifying in reasonable detail the nature of the
failure; provided that if the nature of the default is such that it cannot reasonably be cured within
the thirty-day period, no default shall be deemed to exist if the defaulting Party commences a cure
within that thirty-day period and diligently and expeditiously pursues such cure to completion
within ninety (90) days.

7.2. Remedies. In the event of a default hereunder and failure by the defaulting Party
to timely cure the default.as provided in paragraph 7.1, the non-defaulting Party shall have all
remedies available to it at law or in equity. City or Developer, or any successor-in-interest or
assignee, may institute a legal action to cure, correct, or remedy any default, to enforce any
covenant or agreement herein, or to enjoin any threatened or attempted violation, including suits
for declaratory relief, specific performance, relief in the nature of mandamus and actions for
damages, provided, however, that claims for damages shall be limited to actual damages. The
Parties hereby waive any right to seek consequential, punitive, multiple, exemplary or any other
damages other than actual damages for a breach of this Agreement by either Party.

7.3. Delays; Waivers. Except as otherwise expressly provided in this Agreement, any
delay by any Party in asserting any right or remedy under this Agreement shall 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 shall not be considered as a waiver of rights
with respect to any other default by the non-defaulting Party or with respect to the particular default
except to the extent specifically waived in writing.

7.4. Rights and Remedies Cumulative. The rights and remedies of the Parties are
cumulative, and the exercise by either Party of any one or more of such rights shall not preclude
the exercise by it, at the same or different times, of any other right or remedy for any other default
by the other Party.

SECTION 8. MISCELLANEOUS PROVISIONS.

8.1. Notices. Except as otherwise required by law, any notice, demand or other
communication given hereunder, shall be in writing and shall be given by personal delivery or be
sent by certified or registered U.S. Mail, return receipt requested, addressed to the Parties at their
respective addresses set forth below, or at such other address as a Party may designate in writing
pursuant to the terms of this paragraph, or by facsimile machine or by any nationally recognized
express or overnight delivery service (e.g., Federal Express or UPS), with all postage and other
delivery charges prepaid:

To Developer: Specht Commercial Properties, LLC
1728 W. Lark Drive
Chandler AZ 85286

Attention: David Specht
Phone: (480) 699-4598

To Chandler: City of Chandler
Cultural Development Director
Mail Stop 416, Post Office Box 4008
Chandler, Arizona 85244-4008
Attn.: Kim Moyers
Phone: (480) 782-3045
Fax: (480) 782-2209

With a copy to: City of Chandler
City Attorney’s Office
P. O. Box 4008
Chandler, AZ 84244-4008
Phone: (480) 782-4643
Fax: (480) 782-4652

8.2. Effective Date of Notices. All such notices, demands or other communications
will (i) if delivered personally or delivered through a same day delivery/courier service be deemed
effective upon delivery or refusal to accept delivery by the addressee, and (ii) if delivered by U.S.
mail in the manner described above be deemed effective upon the earlier of receipt or three (3)
business days after deposit in a post office operated by the United States or with a United States
postal officer (in each case regardless of whether such notice, demand or other communication is
received by any other person to whom a copy of such notice, demand or other communication is
to be delivered pursuant to this paragraph). Any notice sent by a recognized national overnight
delivery service shall be deemed effective one (1) business day after deposit with such service.
Any notice sent by fax machine shall be deemed effective upon confirmation of the successful
transmission by the sender’s fax machine. Notwithstanding the foregoing, no payment shall be
deemed to be made until actually received in good and available funds by the intended payee. Any
communication made by e-mail or similar method shall not constitute notice pursuant to this
Agreement.

8.3. Waiver of Right to Trial by Jury. The Parties expressly covenant and agree that
in the event of a dispute arising from this Agreement, each Party waives any right to a trial by jury.
In the event of litigation, the Parties agree to submit to a trial before the court.

8.4. Attorneys’ Fees. In the event of commencement of a legal action in an appropriate
forum by a Party to enforce any covenant or any of such Party’s rights or remedies under this
Agreement, including any action for declaratory or equitable relief, the prevailing Party in any
such action shall be entitled to reimbursement of its reasonable attorneys’ fees and court costs,
including, but not limited to, its costs of expert witnesses, transportation, costs of transcript
preparation, and other reasonable and necessary direct and incidental costs of such dispute.

8.5. Amendment. No change or addition is to be made to this Agreement except by
written amendment executed by City and Developer. Within ten (10) days after any amendment
to this Agreement, such amendment shall be recorded in the Official Records of Maricopa County,
Arizona.

8.6. Governing Law. This Agreement shall be governed by and construed under the
laws of the State of Arizona, including the applicability of A.R.S. § 38-511.

8.7. Severability. If any provision of this Agreement is declared void or unenforceable,
such provision shall be severed from this Agreement, which shall otherwise remain in full force
and effect. If any applicable law or court of competent jurisdiction prohibits or excuses City from
undertaking any contractual commitment to perform under any provision hereunder, the remaining
portions of this Agreement shall remain in full force and effect, and the Parties will negotiate
diligently in good faith for such amendments of this Agreement as may be necessary to achieve
the original intent of this Agreement, notwithstanding such invalidity or unenforceability.

8.8. Recordation. This Agreement shall be recorded in its entirety in the Official
Records of Maricopa County, Arizona not later than ten (10) days after execution of the Agreement
by the Parties.

8.9. 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 (i) this Agreement as in full force and effect, and (ii) the performance of the obligations
hereunder at any time.

8.10. No Partnerships, Third Parties. It is not intended by this Agreement to, and
nothing contained in this Agreement shall, create any partnership, joint venture, or other
arrangement between Developer and City. No term or provision of this Agreement is intended to,
or shall, be for the benefit of any person not a party hereto, and no such other person shall have
any right or cause of action hereunder, except for permitted transferees or assignees to the extent
that they assume or succeed to the rights and/or obligations of Developer under this Agreement.

8.11. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all so executed shall constitute one agreement, binding
on the Parties.

8.12. Entire Agreement. This Agreement and the Exhibits hereto constitute the entire
agreement between the Parties pertaining to the subject matter hereof. All prior and
contemporaneous agreements, representations, and understandings of the Parties, oral or written,
are hereby superseded and merged herein.

8.13. Additional Provisions. Developer agrees to and does knowingly waive any and
all rights to compensation for diminution in value pursuant to A.R.S. § 12-1134 that may now or
in the future exist as a result of the approval or performance of, and all conditions, terms and
agreements contained in this Agreement.

8.10. No Partnerships, Third Parties. It is not intended by this Agreement to,
and nothing contained in this Agreement shall, create any partnership, joint venture, or
other arrangement between Developer and City. No term or provision of this Agreement
is intended to, or shall, be for the benefit of any person not a party hereto, and no such
other person shall have any right or cause of action hereunder, except for permitted
transferees or assignees to the extent that they assume or succeed to the rights and/or
obligations of Developer under this Agreement.

8.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all so executed shall
constitute one agreement, binding on the Parties.

8.12. Entire Agreement. This Agreement and the Exhibits hereto constitute the
entire agreement between the Parties pertaining to the subject matter hereof. All prior
and contemporaneous agreements, representations, and understandings of the Parties, oral
or written, are hereby superseded and merged herein.

8.13. Additional Provisions. Developer agrees to and does knowingly waive
any and all rights to compensation for diminution in value pursuant to A.R.S. § 12-1134
that may now or in the future exist as a result of the approval or performance of, and all
conditions, terms and agreements contained in this Agreement.

IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in
its name and behalf by its Mayor, and Developer has signed the same, on or as of the day
and year first above written.

CHANDLER:
CITY OF CHANDLER,
an Arizona municipal corporation

Mayor

ATTEST:

City Clerk

APPROVED AS TO FORM:

City Attorney TA

STATE OF ARIZONA )

) ss.
County of Maricopa )
The foregoing Agreement was acknowledged before me this day of >

2021, by Kevin Hartke, Mayor of City of Chandler, an Arizona municipal corporation, on
behalf of the municipal corporation.

Notary Public
My Commission Expires:

DEVELOPER:

Specht Commercial Properties, LLC
an Arizona limited liability company

=

i

Name: She. Ser Dad Soeche

ie o
Its: LYI Ss

STATE OF ARIZONA )
) ss.
County of Maricopa )

The foregoing Agreement was ‘Cowie before me wis SUL day of Ma >
2021, by David MA. DOOM the OWV\1) Y of

Specht Commercial Properties, LLC, an Arizona limited liability company, on behalf of

the limited liability company.

Notary Public

My Commission Expires:

03-3): 20°24

Jessica Sweet
Notary Public
Maricopa County, Arizona
My Comm. Expires 03-31-24

Commission No. 578903

[rp47