First Amendment to Development Agreement

WHEN RECORDED, RETURN TO:

City of Chandler

City Attorney’s Office

Attn: Kelly Schwab

Mail Stop 602

P.O. Box 4008

Chandler, Arizona 85244-4008

FIRST AMENDMENT TO
DEVELOPMENT AGREEMENT

THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (this “Amendment”)
is made and entered into as of the 5 day of /YU@ 2022, by and between the CITY OF
CHANDLER, an Arizona municipal corporation/ (“City”), and SPIKE LAWRENCE

VENTURES, LLC, an Arizona limited liability company (“Developer”).
RECITALS

A. City and Developer are parties to the Development Agreement recorded May 14,
2018 as Document No. 2018-0367800, official records of Maricopa County (the “Agreement”),
which governs the development of real property located at the northwest corner of Arizona Avenue
and Chicago Street in Chandler, Arizona (the “Project”).

B. Developer has completed all Phase 1A and 1B Minimum Improvements as required
by section 5.1(B) of the Agreement. City has completed its construction obligations as required by
section 6 of the Agreement.

(on Phase 2 of the Minimum Improvements have not been constructed. For purposes of
the Agreement, the property described as Phase 2 shall mean that parcel labeled no. 303-09-173
on the records of the Maricopa County Assessor’s Office (the “Phase 2 Property”).

Dz. Since the Agreement was executed in 2018, the Covid-19 pandemic has created
significant challenges to commercial office development that were unforeseen when the parties
agreed to the original development plan for the Project. Simultaneously, the pandemic’s effects on
the housing market have exacerbated the low inventory of residential housing in Chandler and
throughout the region. The parties believe that it would be in their best interest to amend the
agreement to permit Developer to construct a mixed-use building on the Phase 2 Property that
includes multi-family residential housing.

E. The Agreement (as amended by this Amendment) is a development agreement
pursuant to the provisions of A.R.S. § 9-500.05.

Error! Unknown document property name.

AGREEMENT
1. Term. Paragraph 1.2 is amended and replaced in its entirety with the following:
The Agreement shall be in effect from the Effective Date until January 1, 2042.

2. Minimum Improvements. Paragraph 5.1(A) is hereby amended and replaced in its

entirety with the following:

The Minimum Improvements shall consist of at least four (4) buildings. Phase 1A will
consist of one (1) single story, 7,500 square foot retail/restaurant, and one (1) mixed-use
three-story building comprised of at least 47,000 square feet with a minimum of 33,000
square feet of office space. Located in between the two buildings fronting Arizona Avenue
will be the Phase 1A Event Square that is described in Section 5.1 (B)(2). Phase 1B will
consist of one (1) four-story hotel with a total of at least 108 doors. Phase 2 will consist of
one mixed-use building containing at least four stories and totaling at least 55,000 square
feet. Minimum Improvements shall also be designed to strengthen the pedestrian appeal
while complementing, the vertical City Hall building directly across Arizona Avenue and
the already-constructed buildings in Phase 1A and Phase 1B.

3. Phase 2 Minimum Improvements. Paragraph 5.1(C) is hereby amended and

replaced in its entirety with the following:

The development of Phase 2 of the Property shall commence in a single phase and shall
include the Phase 2 Minimum Improvements consisting of the following (referred to
collectively as “Phase 2 Minimum Improvements):

(1) A minimum four-story building totalling at least 55,000 square feet along
Chicago and Oregon Streets with the following specifications:

a. The ground floor will be built for retail and/or office tenants with at least
3,000 square feet of additional outdoor patio space beyond the building
footprint. The ground floor may not contain any residential units or
amenities, other than those essential for mechanical operation of the
building and the swimming pool;

b. Floors two through four will contain at least 34 residential
condominiums;

c. Floor two will contain residential condominiums and amenities for
residents, including a fitness area and mailroom;

d. The building footprint will be at least 14,000 square feet;

e. The building must be taller than the hotel constructed during Phase 1;

f. The building will include an underground parking garage containing at
least 40 parking spaces for residents of the building.

(2) Completion of sidewalks and landscaping as outlined in the South Arizona
Avenue Area Plan on the adjacent roadway frontages;
(3) Completion of all on-site utility infrastructure for the Phase 2 Minimum

Improvements.

4. Building Design and Uses. The Phase 2 mixed-use building described in paragraph
3 of this Amendment is subject to the following:

a. The building must be designed to be consistent with the Preliminary
Development Plan approved by City Council. The ground floor shall be
designed to provide substantial on-street retail activation. City staff shall have
final administrative authority to approve a design that is consistent with this
Agreement and the Preliminary Development Plan.

b. Ground floor must contain at least eight thousand (8,000) square feet of retail
space that is open to the public. The retail shops must be located on the east and
south sides of the Phase 2 building.

c. Residential units may not be used for vacation rentals or short-term rentals,
meaning that the units may not be offered for transient lodging less than thirty
(30) days in duration. Developer must record Covenants, Conditions, and
Restrictions (“CC&Rs”) that contain this prohibition on vacation rentals and
short-term rentals, and such CC&Rs must remain in effect for the duration of
the Agreement Term.

d. The CC&R’s must also contain the following language indicating that New
Square Phase 2 is in the heart of the Entertainment District and music and noise
associated with urban living will be part of the ambiance of downtown living:

Downtown Entertainment District.

Each unit owner understands and acknowledges that the Property is located in
the City of Chandler Downtown Entertainment District, and that local
businesses will operate entertainment uses that produce ambient noise and may
include crowds of people and late-night amplified music. Each unit owner
understands and acknowledges that such uses are legal and should be expected
to continue indefinitely.

5. Phase 2 Development Schedule. Paragraph 5.2(D) is amended and replaced in its
entirety with the following:

D. Phase 2 Development Schedule.

PHASE 2 DEADLINES

ACTION DEADLINE

Developer's submittal of administratively complete} Six months from the
application(s)for Phase 2 land use entitlements required for | Effective Date of this
Phase 2 Minimum Improvements Amendment

Developer obtains Final Development Approval No later than nine
months from the
Effective Date of this

Amendment
Developer's submittal to City of 100% completed plans No later than six months
for required civil work on the project from the Effective Date

of this Amendment

Developer obtains City approval of site, civil, and building No later than six
construction plans months from submittal
of 100% complete civil
and building
construction plans

Developer's Commencement of Construction of the Phase 2 | No later than three
Improvements (“Phase 2 Commencement Date”) months after City
approval of site and
structural civil plans

Developer's Completion of Construction of the Phase | No later than 18 months
2 Improvements (the “Phase 2 Completion Date”) from commencement of
Phase 2 Minimum
Improvements

Timely City approval of applications, construction plans, and permits in accordance with the
stated Deadlines require Developer’s submission to the City of 100% completed, code-
compliant plans upon first submittal; timely and complete responses to City comments; and full
coordination with City staff for plan review and permit approval.

6. Garage Obligations. Paragraph 6.1 is amended and replaced in its entirety with the
following:

A. Garage Obligations. The City, at its sole cost and expense, has built a parking
facility (“Property Garage”) at the northwest corner of Oregon Street and
Chicago Street. Developer has assigned its rights to the Property Garage to two
separate successor entities, New Square, LLC, and Down Town Hotel, LLC.
Maintenance obligations and use of the Property Garage are governed by both
the “Parking Use and Maintenance Agreement — Oregon Street Garage” that
was executed between the City and New Square, LLC, and also the “Parking
Use and Maintenance Agreement — Oregon Street Garage” that was executed
between the City and Down Town Hotel, LLC (collectively, the “Parking
Agreements”), both of which Parking Agreements were executed and effective
December 9, 2019. Developer shall have no further rights to use the Property
Garage, nor shall Developer be obligated to provide maintenance and upkeep
on the Property Garage, except as described in the Parking Agreements.

B. Phase 2 Garage Use. City may, at its sole discretion, enter into a separate
parking agreement with the Developer or property owner of the Phase 2
building to provide parking for residential tenants. The Parties acknowledge
and agree that the payment rates for parking outlined in the New Square, LLC,
parking agreement referenced above do not apply to parking spaces for Phase
2 users, and a new payment amount will be negotiated by the Parties. Likewise,
the Developer/property owner of the Phase 2 Property shall have no obligation
to provide ongoing maintenance for the Property Garage.

7. Development Restriction. Developer agrees that it shall use its commercially best
efforts to cause the residential units of the Phase 2 Project to be developed, marketed, and sold as
single-family units for sale, and not as a horizontally-owned single-family rental community,
which for the purposes of this Agreement is defined as more than two single-family homes owned
by the same person or entity and offered for lease for a term longer than 30 days. Further, to assure
maintenance of common areas, Developer will cause the formation of an association that, upon
completion of the Phase 2 Project, will manage and maintain all common areas of the Phase 2
Property. Nothing in this section shall be deemed as requiring Developer to take any action that
would subject City to liability for violating Arizona or federal law.

8. Developer Ownership and Management. Upon request by City, Developer must
furnish information to City that describes all persons or entities having ownership or management
rights of Developer, including a description of the ownership percentages and/or decision-making
authority of each person or entity, including without limitation a copy of all operating agreements
and articles of incorporation, and any other information reasonably requested by City for this
purpose, including any amendments to such documents. Developer must provide Notice to City
within thirty (30) days if there is any change of ownership or management of Developer through
amendment or other agreement of any of the legal documents or agreements governing the
business operation of Developer.

9. Definitions. Capitalized terms not otherwise defined in this Amendment shall have
the meanings given to such terms in the Agreement.

10. Effect of Amendment. Except as amended hereby, the Agreement is ratified and
shall remain in full force and effect. If there is any conflict between the provisions of the
Agreement and the provisions of this Amendment, the provisions of this Amendment will prevail.

IN WITNESS WHEREOF, the undersigned have caused this First Amendment to
Development Agreement to be executed as of the day and year first above written.

ATTEST: CITY OF CHANDLER, an Arizona municipal

corporation

By. By.
City Clerk Mayor

APPROVED AS TO FORM:

City Attorney TA

STATE OF ARIZONA _ )
) ss.
County of Maricopa )

The foregoing instrument was acknowledged before me this___day of » 2022,
by Kevin Hartke, who was acknowledged to be the Mayor of City of Chandler, an Arizona
municipal corporation, on behalf thereof.

Notary Public
My Commission Expires:

SPIKE LAWRENCE VENTURES, LLC, an
Arizona limited liability company

By Meet MM Wid! fee —

Name,
C

aves me. "Spite Lawreuce
MuUaging weuber

Title

STATE OF ARIZONA _ )
) ss.
County of Maricopa )

The foregoing instrument was acknowledged before me this_S day of , 2022,
by (Noyes Lawnvonce who was acknowledged to be the Wanadaya WMumleey of SPIKE

LAWRENCE VENTURES, LLC, an Arizona limited liability/company, onbehalf thereof.

X

OFFICIAL SEAL
AUBREY N CASPER
Notary Public - Arizona
MARICOPA COUNTY
Commission # 551784 4
My Commission Expires

AUGUST 20, 2022

Notary Public
My Commission Expires: x \ad | te. \
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