2nd Amendment to Development Agreement

City of Chandler — Regular Meeting (2023-08-17)

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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

SECOND AMENDMENT TO
DEVELOPMENT AGREEMENT

THIS SECOND AMENDMENT TO DEVELOPMENT AGREEMENT (this “Second
Amendment”) is made and entered into as of the ___ day of _______, 2023, 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.
City and Developer are parties to the First Amendment to Development Agreement
recorded June 7, 2022, as Document No. 2022-0483408, official records of Maricopa County (the
“First Amendment”).

C.
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”).

D.
City and Developer, through its affiliated subsidiary companies Down Town Hotel,
LLC, and New Square, LLC, have entered into two agreements titled “Parking Use and
Maintenance Agreement – Oregon Street Garage,” both dated December 9, 2019, which govern
Developer’s limited right to use the City-owned parking garage located on the northwest corner of
Arizona Avenue and Chicago Street.

E.
The parties believe that it would be in their best interest to rescind the First
Amendment and once again amend the agreement to permit Developer to construct a mixed-use
building on the Phase 2 Property that includes an expansion of the hotel constructed during Phase
1.

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

AGREEMENT

1.
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, which 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
an expansion to the mixed-use hotel building constructed as Phase 1B, containing at least
four stories and totaling at least 55,000 square feet of usable space. The Minimum
Improvements shall 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.
2.
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 expansion to the Phase 1B hotel building totaling at
least 55,000 square feet of usable building and outdoor site space, and 69 additional hotel
rooms (or 67 rooms if two double-sized suites are built) along Chicago and Oregon Streets
with the following specifications:
a. The ground floor will be built for and operated by a retail/restaurant
tenant with additional outdoor patio space beyond the building footprint.
b. The ground floor will include 3,500 square-foot or more conference
space with patio space beyond the building footprint.
c. The ground floor will have a breezeway at or close to the elevator of the
Oregon Street Parking Garage. The breezeway will be 14-18 feet high
with clear glass along the sidewalls and adequate lighting, creating a
safe and inviting pedestrian access into New Square and the downtown
area as depicted in Exhibit A.
d. Green space will be added on the east side of the building around the
convention space for beautification and activation.
(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)
The development of Phase 2 Improvements will require a re-plat of Lots 1
and 4 to modify the hotel site for expansion and to modify the parking area.

3.
Building Design and Uses. The Phase 2 mixed-use building described in paragraph
2 of this Second Amendment is subject to the following:
a. The building must be designed to be consistent with the Preliminary
Development Plan approved by City Council and the design renderings attached
as Exhibit A to this Second Amendment. 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, the Preliminary Development Plan, and Exhibit A.
b. Developer shall install a placemaking public-art piece that will assist in the
activation of the northeast corner of Oregon Street and Chicago Street. The art
piece will be subject to the reasonable approval of City and may include a mural
or free-standing sculpture that fits with the overall theme of the downtown. The
art piece may not include any corporate branding or advertisement.
4.
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
application(s) for Phase 2 land use entitlements required for
Phase 2 Minimum Improvements
Six months from the
Effective Date of this
Second Amendment
Developer obtains Final Development Approval
No later than nine
months from the
Effective Date of this
Second Amendment
Developer's submittal to City of 100% completed plans
for required civil work on the project
No later than six months
from the Effective Date
of
this
Second
Amendment
Developer obtains City approval of site, civil, and building
construction plans
No later than six
months from submittal
of 100% complete civil
and building
construction plans

Developer's Commencement of Construction of the Phase 2
Improvements (“Phase 2 Commencement Date”)
No later than three
months after City
approval of site and
structural civil plans
Developer's Completion of Construction of the Phase
2 Improvements (the “Phase 2 Completion Date”)
No later than 18 months
from commencement of
Phase 2 Minimum
Improvements

Timely City approval of applications, construction plans, and permits in accordance with the
stated Deadlines requires 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.

5.
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 subsidiary 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. The Parties agree that the City is under no obligation to
provide additional reserved parking spaces in the Property Garage to the Phase
2 owner under the Parking Agreements. The City agrees to amend one or both
of the Parking Agreements for the purpose of allowing a number of New Square
LLC’s parking spaces to be transferred to Down Town Hotel, LLC for use by
the expanded Phase 2 development.
6.
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.
7.
Term. Paragraph 1.2 of the Agreement is amended to extend the Term until
December 31, 2026. The Parties may terminate this Agreement earlier upon Developer’s final
completion of the Minimum Improvements.
8.
Definitions. Capitalized terms not otherwise defined in this Second Amendment
shall have the meanings given to such terms in the Agreement.
9.
Effect of Amendment. Except as amended by this Second Amendment, the
Agreement is ratified and shall remain in full force and effect. The Parties agree that the First
Amendment is rescinded and is no longer in effect. If there is any conflict between the provisions
of the Agreement and the provisions of this Second Amendment, the provisions of this Second
Amendment will prevail.

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

CITY OF CHANDLER, an Arizona municipal
corporation

By__________________________________

Mayor

ATTEST:

City Clerk

APPROVED AS TO FORM:

City Attorney

Exhibit A
Minimum Improvements Design

FRONT VIEW - EAST SIDE OF HOTEL EXPANSION

FRONT ANGLE VIEW - SOUTHEAST SIDE OF HOTEL EXPANSION

BACK ANGLE VIEW - SOUTHWEST SIDE OF HOTEL EXPANSION