City Council Meeting - FINAL

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Meeting Date: 07/06/2021  
From: Bryce Doty, Real Estate Manager

Consideration and Adoption of Ordinance No. 2021-18:  An Ordinance of the Flagstaff City Council authorizing the acquisition of real property interests for the Beulah/University Roadway Project; providing for delegation of authority, severability, and establishing an effective date
At the July 6th, 2021 Council Meeting:
1) Read Ordinance No. 2021-18 by title only for the first time
2) City Clerk reads Ordinance No. 2021-18 by title only (if approved above)
At the August 24th, 2021 Council Meeting:
3) Read Ordinance No. 2021-18 by title only for the final time
4) City Clerk reads Ordinance No. 2021-18 by title only (if approved above)
5) Adopt Ordinance No. 2021-18
Executive Summary:
The City has determined that it is necessary to obtain additional property interests for the Beulah/University Roadway  Project.  Adoption of this ordinance will authorize the acquisition of the real property interests for the project, as required by the Flagstaff City Charter.

A public/private partnership (P3) between the City of Flagstaff, Arizona Department of Transportation and Vintage Partners, LLC, commonly known as the Mill Town project was entered into in order to, in part, enable the extension of Beulah Boulevard to University Avenue and the realignment of University Avenue. The P3 has resulted in many agreements detailed in the background/history.
The Mill Town Final Plat, a result of the P3, approved on December 3, 2019, delivers most of the right-of-way required for this project. The related Development Agreement between the City and Vintage Partners, LLC, governs the acquisition of any additional easements or rights-of-ways required for the project, specifically providing the City the opportunity to obtain all required property interests, if necessary.
Financial Impact:
The Beulah /University Roadway Project is currently budgeted in FY2021-2022 in the amount of $7,355,616 in the Transportation Fund.
Policy Impact:
Connection to PBB Key Community Priorities/Objectives & Regional Plan:
Priority Based Budget Key Community Priorities and Objectives

Safe and Healthy Community -
  • Foster a safe, secure, and healthy community.
  • Ensure the built environment is safe through the use of consistent standards, rules and regulations, and land use practices.
Inclusive and Engaged Community -
  • Advance social equity and social justice in Flagstaff. 
Sustainable, Innovative Infrastructure -
  • Deliver outstanding services to residents through a healthy, well maintained infrastructure system.
  • Utilize existing long-range plans that identify the community's future infrastructure needs and all associated costs.
  • Identify smart traffic management, multi modal transportation, and alternative energy opportunities.
Environmental Stewardship -
  • Implement sustainable building practices and alternative energy and transportation options.
  • Implement, maintain and further the Climate Action and Adaptation Plan.
Regional Plan Goal T.2 -
  • Improve transportation safety and efficiency for all modes.
Has There Been Previous Council Decision on This:

There have been many previous City Council actions related to this project as outlined in the Background/History.

Options and Alternatives:
1. Approve ordinance 
2. Do not approve property acquisitions, and provide other direction.
On May 16, 2000, the voters of Flagstaff passed proposition 403 which established the local transportation tax 2000 to provide funding for a variety of transportation system improvements including the arterial and collector street system, and multi-modal elements.  The information pamphlet for this proposition specifically identified the Beulah Boulevard extension and the University Avenue realignment as “missing links” within the overall transportation network.   The exhibit for proposition 403 showed an alignment for these roadways similar to the current proposal. The transportation tax has been collected on a pay-as-you-go basis with a total of $7.375 million allocated for these transportation improvements.  These funds became 100% available as of July 1, 2017; however, many years of work have been spent on moving this project forward.  

In 2005, the City of Flagstaff acquired APN 103-21-002, a 9.58-acre site known as the “Fresquez Parcel” for approximately $2.7 million.  This purchase was the first step in moving this transportation project to fruition and provides the majority of right-of-way necessary to accomplish the Beulah Boulevard extension.  In order to accomplish the University Avenue/Drive realignment, the ADOT District Offices and Regional Laboratory need to be relocated.   

Following the acquisition of the Fresquez parcel, the City and ADOT began to explore options for partnerships in order to relocate the ADOT facilities.  In July 2009, the Arizona P3 (Public-Private-Partnership) Legislation was passed, allowing for partnerships between a public agency (in this case two public agencies) and a private-sector entity to allow greater participation in the delivery of a transportation project.  Typically, the public agency assumes all the risks and responsibilities for a transportation project, but under the P3 the private partner takes on some of those risks and responsibilities.  The Flagstaff P3 is the first time this initiative has been used to acquire new facilities for ADOT, which will free up land for roadway improvements and redevelopment.  A Memorandum of Understanding was executed on March 28, 2012, and set out the parameters for how this P3 project would function.  The City and ADOT would combine the remainders of their parcels after right-of-way dedication to be used for redevelopment.  The redevelopment parcel would then be traded from ADOT to the developer for relocated ADOT facilities.    

ADOT issued a Request for Qualifications in March 2012 to solicit a private partner who could relocate the ADOT facilities allowing for the construction of the road improvement project.  The selected private sector partner was Vintage Partners, who proposed to relocate the ADOT facilities to the former Harkins Theater on Woodlands Village Boulevard.  The P3 project was formalized through a Pre-Development Agreement (PDA) between Vintage, the City, and ADOT in December 2014. The PDA provides an overview of the various transactions, authorizes Vintage Partners to prepare and submit required materials for a Site Plan and Rezoning application for ADOT and City property located between Milton Parkway and Beulah Avenue, provides an anticipated schedule, requires an implementation agreement between ADOT and Vintage Partners, provides the term of the agreement, provides remedies for disputes and includes miscellaneous provisions required for an ADOT P3 project.
On August 21, 2017, the City Council approved the Reinstatement of, and First Amendment to the P3 Pre-Development Agreement extending the term to December 31, 2017; on December 19, 2017, a Second Amendment was approved that extended the term to March 31, 2018; on March 20, 2018, a Third Amendment was approved that extended the term to June 30, 2018.
On April 17, 2018, City Council approved the Development Agreement (DA) between The City and Vintage Partners. The DA provides for the sequence of approvals to facilitate the conveyance of the City Property to ADOT, the relocation of ADOT to the former Harkins Site, and the recordation of the final plat. It acknowledges that other agreements, including an Inter-Governmental Agreement between the City and ADOT, and an Implementation Agreement between ADOT and Vintage, will also speak to the timing and conditions for the property transfers from the City to ADOT, and ADOT to Vintage.
On August 18, 2018, City Council approved an IGA between the City and ADOT in order to facilitate the completion of the project.

On December 3rd, 2019, City Council approved the Mill Town Final Plat.
Key Considerations:
The property acquisitions will enable the CIty to complete planned roadway improvements. 
Community Benefits and Considerations:
The University/Beulah roadway improvements have been identified as an important project to incrementally address the existing congestion problem on Milton Road.
Community Involvement:
Inform - The public voiced opinions on the proposed P3/Mill Town project during a public hearing which occurred prior to the rezone and development agreement which were approved by the City Council on April 17, 2018.
Involve - Public participation was included in the rezoning process.
Collaborate - P3/Mill Town is certainly a collaboration between the State, City, and Vintage Partners, LLC, a private company, and the public who commented during the public hearing on the rezoning.
Empower - The voters of Flagstaff approved the 2000 Transportation Tax which funded the Fresquez acquisition and the $7.4 million programed in the Capital program for the University/Beulah roadway improvements.
Ord. 2021-18
Ordinance Exhibit 1
Ordinance Exhibit 2
Ordinance Exhibit 3


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