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HomeMy WebLinkAboutPackets - Council Packets (755) AGENDA ORO VALLEY TOWN COUNCIL STUDY SESSION JANUARY 28, 2009 ORO VALLEY TOWN COUNCIL CHAMBERS 11000 N. LA CANADA DRIVE STUDY SESSION - AT OR AFTER 5:30 p.m. CALL TO ORDER ROLL CALL 1. Town of Oro Valley FY 2008/09 Mid-Year Budget Review 2. Preview of the Town of Oro Valley Fiscal Year 2009/2010 Budget 3. Economic Development Incentive Policy Guidelines ADJOURNMENT POSTED: 01 22 09 2:00 p.m. ejk The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability needs any type of accommodation, please notify the Town Clerk's Office at (520)229-4700. TOWN OF ORO VALLEY Page 1 of 4 COUNCIL COMMUNICATION STUDY SESSION DATE: JANUARY 28, 2009 TO: HONORABLE MAYOR AND COUNCIL FROM: STACEY LEMOS, FINANCE DIRECTOR SUBJECT: TOWN OF ORO VALLEY FY 2008/09 MID-YEAR BUDGET REVIEW SUMMARY: The purpose of this communication is to provide the Town Council with a mid-year update of the Town's financial status with revenue and expenditure totals through December 31, 2008 and projections through year- end. General Fund Attachment A shows General Fund revenues and expenditures-to-date through December, as well as year- end estimates for each. Through December, revenue collections total $13.9 million and expenditures total $13.7 million. As indicated in the report, almost all categories of revenue in the General Fund indicate below budget levels at year-end. Second half local sales tax collections are anticipated to be slightly lower than the first half collections due the expiration of the 2% utility sales tax, further declines in local spending activity due to the economic downturn, and lower construction activity in the residential and commercial sectors. The year-end projections in the General Fund are as follows: Revenues $ 27,742,337 Expenditures 29,881,447 Estimated Deficit ($ 2,139,110) The following identified cost savings have been incorporated to arrive at the above year-end expenditure projections: No MOC Debt Service payment $ 833,000 No Tax Rebate for Sanofi Aventis 360,000 No General Fund Transfer to Capital Asset Replacement Fund (CARF) 500,000 Insurance Premium cost savings 100,000 Vacancy Savings-Hiring Freeze 152,955 Sales Tax Rebate savings 247,619 Total Cost Savings $2,193,574 The FY 2008/09 budget, however, was adopted with a planned deficit of$1,730,535 for one-time expenditures such as capital improvement projects (CIP), State Land and miscellaneous annexation expenditures, update of the Environmentally Sensitive Land Ordinance (ESLO), the November election costs and costs for the cultural and historic resources inventory. The above-calculated year-end deficit of $2.1 million less the budgeted deficit of $1.7 million results in an excess deficit in the General Fund of approximately $400,000. Of this $400,000 excess deficit, $231,808 TOWN OF ORO VALLEY Page 2 of 4 COUNCIL COMMUNICATION STUDY SESSION DATE: JANUARY 28, 2009 represents the unbudgeted cost of the one-time investment loss incurred by the General Fund due to the Lehman Brothers bankruptcy. This leaves an estimated $168,000 deficit projected at year-end due primarily to declining revenues from lower sales tax collections, lower anticipated building permit activity, and lower interest income on invested funds. As mentioned in the December 17th budget status report through November, staff recommends the utilization t on of pre-collected commercial building permit revenues that were carried forward in the General Fund's beginning fund balance of $16.7 million this year for projects such as the Oro ValleyMarketplace, wherebythe p Town collected for these building permits up front last fiscal year, but the development review and inspection p p work on this project continues through this fiscal year. It is recommended that we utilize thosep re-collected revenues included in our fund balance carryforward to cover the expenses of performing the review and inspection work that continues throughout this year. It is also important to note that in most cases, the year-end expenditure estimates for the departments are the adopted budget amounts. Through mid-year, almost all of the departments have spent less than 50% of their adopted budgets, and historically, most departments tend to end the year anywhere from 1% - 3% below their adopted budgets, so additional expenditure savings could still be realized at year-end if current spending trends continue. Highway Fund In the Highway Fund (Attachment B), revenues collected through December total $2.5 million, while expenditures through December total $2.2 million. As in the General Fund, year-end revenue collections in the Highway Fund are anticipated to come in below budget levels by approximately 6.4%, or approximately $357,000. The year-end projections in the Highway Fund are as follows: Revenues $ 5,251,963 Expenditures 5,344,300 Estimated Deficit ($ 92,336) Of this estimated deficit of $92,336, $40,816 represents the unbudgeted cost of the one-time investment loss to the Highway Fund of the Lehman Brothers bankruptcy. This leaves an estimated $51,520 deficitJrojected p at year-end due to declining State shared gas tax revenues and lower interest income on invested funds. Staff recommends further monitoring of year-end projected expenditures and revenues to determine whether this projected deficit could be covered by below budget level spending during the remainder of theyear in this fund. Bed Tax Fund In the Bed Tax Fund (Attachment C), revenues collected through December total $444,496, while expenditures total $237,304. The year-end projections in the Bed Tax fund are as follows: Revenues $ 1,091,932 Expenditures 713,421 Estimated Surplus $ 378,511 TOWN OF ORO VALLEY Page 3 of 4 COUNCIL COMMUNICATION STUDY SESSION DATE: JANUARY 28, 2009 The Bed Tax Fund had a beginning of the year fund balance carry forward of approximately $814,000. With the projected year-end surplus above of $379K, it is anticipated that this fund will have approximately $1.2 million available at year-end that could be transferred to support service levels in the General Fund next fiscal year. Public Transportation Fund In the Public Transportation Fund (Attachment D), revenues collected through December total $409,040, while expenditures total $293,122. Year-end projections in this fund indicate an estimated deficit of $69,213. Staff recommends further monitoring of year-end projections to determine whether this projected deficit could be covered by below budget level spending for the remainder of the year. Townwide Roadway Development Impact Fee Fund In the Roadway Impact Fee Fund (Attachment E), revenues collected through December total $889,341, while expenditures total $5,107,343. This fund had a carry forward fund balance at the beginning of the year of $8.6 million primarily from the Highway Extension Loan Program (HELP) funds dedicated to paying for the La Canada widening project from Naranja to Tangerine. It is estimated that this fund will have approximately $2 million in HELP Loan proceeds remaining at the end of this fiscal year. Staff is evaluating whether it will be viable to use those excess funds to move forward with the widening of Lambert Lane and whether we will have sufficient local impact fees to match the costs of this project. Stormwater Utility Fund In the Stormwater Utility Fund (Attachment F), revenues collected through December total $347,402, while expenditures total $304,167. Year-end projections in this fund indicate an estimated surplus of $134,313. Water Utility Enterprise Fund In the Water Utility Fund (Attachment G), earned revenues through December total $6.1 million, while expenses total $5.5 million. Year-end projections in this fund indicate revenues coming in at or slightly above budget, while expenses are trending below budget due primarily to several capital projects that are expected to roll over to FY 2009/10. In addition, approximately $340,000 had been budgeted in this fund for debt service on the construction of the Municipal Operations Center that will not be spent this fiscal year. Capital Improvement Program (CIP) Departments continue to make progress on this year's adopted CIP program, with all projects expected to be completed before year-end in the General Fund and Highway Fund. A copy of the full CIP Project Report is attached for your information as Attachment H. ATTACHMENTS: 1. ATTACHMENT A — General Fund Financial Status Report TOWN OF ORO VALLEY Page 4 of 4 COUNCIL COMMUNICATION STUDY SESSION DATE: JANUARY 28, 2009 2. ATTACHMENT B — Highway Fund Financial Status Report 3. ATTACHMENT C — Bed Tax Fund Financial Status Report 4. ATTACHMENT D — Public Transportation Fund Financial Status Report 5. ATTACHMENT E — Townwide Roadway Development Impact Fee Fund Financial Status Report 6. ATTACHMENT F — Stormwater Utility Fund Financial Status Report 7. ATTACHMENT G —Water Utility Enterprise Fund Financial Status Report 8. ATTACHMENT H — FY 2008/09 Project-to-Date CIP Summary 12/, (/ t -/, Z E4vit,OS- Stamey Lem , Finance Director c.....dla.,,,_ David Andrews, Town Manager oJP,_,Ci,gR,,,o Al I AC:HMtN I A I ;::::: FinancialDecember YTD Status FY2008/2009 PouNDED 4 a General Fund REVENUE Actuals Budget Year End % thru 12/2008 Estimate to Budget LOCAL SALES TAX 6,521,972 14,112,072 12,876,170 -8.8% LICENSES&PERMITS 760,959 1,842,250 1,359,331 -26.2% FEDERAL GRANTS 88,473 717,503 176,946 -75.3% STATE GRANTS 54,601 285,744 211,802 -25.9% STATE/COUNTY SHARED 5,283,995 10,991,773 10,716,478 -2.5% OTHER INTERGOVERNMENTAL 338,224 650,083 650,083 0.0% CHARGES FOR SERVICES 537,289 1,059,961 1,105,716 4.3% FINES 137,885 250,000 275,770 10.3% INTEREST INCOME 119,586 600,000 239,171 -60.1% MISCELLANEOUS 48,245 125,000 130,870 4.7% TOTAL GENERAL FUND REVENUE 13,891,228 30,634,386 27,742,337 -9.4% EXPENDITURES Actuals Year End % Budget Estimate to thru 12/2008Budget TOWN COUNCIL 120,030 242,051 242,051 0.0% TOWN CLERK 189,470 463,791 463,791 0.0% TOWN MANAGER 440,771 962,962 962,962 0.0% HUMAN RESOURCES 160,838 392,659 392,659 0.0% ECONOMIC DEVELOPMENT 40,972 188,747 188,747 0.0% FINANCE 403,212 864,411 864,411 0.0% INFORMATION TECHNOLOGY 581,419 1,074,651 1,074,651 0.0% GENERAL ADMINISTRATION 1,833,256 5,143,962 3,332,942 -35-2% LEGAL 408,488 994,667 979,667 -1.5% COURT 341,963 815,079 815,079 0.0% FACILITIES MAINTENANCE 117,223 303,279 303,279 0.0% PLANNING&ZONING 578,006 1,614,458 1,614,458 0.0% BUILDING SAFETY 672,915 1,604,616 1,604,616 0.0% DEVELOPMENT REVIEW 233,018 523,225 523,225 0.0% LIBRARY 509,820 1,309,983 1,309,983 0.0% PARKS & RECREATION 976,995 2,192,280 2,192,280 0.0% PUBLIC SAFETY 6,140,486 13,674,100 13,169,601 -3.7% PERSONNEL SAVINGS (152,955) TOTAL GENERAL FUND EXPENDITURES 13,748,880 32,364,921 29,881,447 -7.7% SURPLUS/(DEFICIT) (1,730,535) (2,139,110) G:\BUDGET ANALYST\Financial Reports 2008-2009\2Q\December FY09 Fund Update_General Fund.xls 1/21/20099:30 AM ° ��P���,DRi p A l l HVMIVItN i b O���ro�_F.. r �y 3 :I7' -';;;_,',::.. 4� :- December YTD Financial Status R- = FY 2008/2009 ko(7,.--,D-7N Highway Fund REVENUE Actuals Year End Budget thru 12/2008 Estimate to Budget LOCAL SALES TAX 1,294,447 2,231,463 2,375,275 6.4% LICENSES& PERMITS 13,877 32,000 27,754 -13.3% STATE GRANTS 77,274 - 77,274 100.0% STATE/COUNTY SHARED 1,093,024 3,160,116 2,678,982 -15.2% INTEREST INCOME 39,832 180,000 79,664 -55.7% MISCELLANEOUS 7,550 5,000 13,015 160.3% TOTAL HIGHWAY FUND REVENUE 2,526,003 5,608,579 5,251,963 -6.4% EXPENDITURES Actuals Year End % Budget thru 12/2008 Estimate to Budget ADMINISTRATION 522,588 1,418,123 947,096 -33.2% CONSTRUCTION DESIGN & MANAGEMENT 591,286 2,161,079 2,161,079 0.0% HIGHWAY PERMITTING 32,513 74,698 74,698 0.0% PAVEMENT MANAGEMENT 131,621 288,687 288,687 0.0% STREET MAINTENANCE 734,974 1,570,454 1,570,454 0.0% TRAFFIC ENGINEERING 147,813 359,294 339,294 -5.6% PERSONNEL SAVINGS (37,008) TOTAL HIGHWAY FUND EXPENDITURES 2,160,795 5,872,335 5,344,300 -9.0% SURPLUS/(DEFICIT) (263,756) (92,336) G:\BUDGET ANALYST\Financial Reports 2008-2009\2Q\December FY09 Fund Update_Highway Fund.xls JP1.EY AR/ ATTACHMENT C e 0 ryt , ,, 17 �� �� � • _ c FY2008/2009 December YTD Financial Status 4-0'VDED"a a Bed Tax Fund REVENUE Actuals Budget Year End % thru 12/2008 Estimate to Budget LOCAL SALES TAX 437,698 1,639,071 1,078,335 -34.2% INTEREST INCOME 6,799 20,000 13,597 -32.0% MISCELLANEOUS 0.0% TOTAL BED TAX FUND REVENUE 444,496 1,659,071 1,091,932 -34.2% EXPENDITURES Actuals Year End 9/0 Budget Estimate to thru 12/2008 Budget ECONOMIC DEVELOPMENT 199,038 646,587 646,587 0.0% GENERAL ADMINISTRATION 12,069 - 12,069 100.0% PARKS & RECREATION 26,197 37,983 54,766 44.2% TOTAL BED TAX FUND EXPENDITURES 237,304 684,570 713,421 4.2% SURPLUS/(DEFICIT) 974,501 378,511 G:\BUDGET ANALYST\Financial Reports 2008-2009\2Q\December FY09 Fund Update_Bed Tax Fund.xls \lP,_1El il,t �� ATTACHMENT D ��t� - �{ � December YTD Financial StatusFY 2008/2009 °UND?ED 4( Public Transportation Fund x `:1e,,;; k ;,. i 9.. iC4F e` ,{ ? Yf +y;x3 I41r:;,,,k.,!,,, <\ ? X � , <,a ',.,I, t"_tF aa!,�n ,:i,,.' s •: a:: ,,Ea,.,i 4' Actuals ' - .Y‘i .n,d °/oBudget thru 12/2008 Estimate to Budget g , FEDERAL GRANTS 60,000 CIV-4,:i 0.0% STATE GRANTS - �.' 179,589 975,321 f 987,4e' _,,, 1.2% CHARGES FOR SERVICES 29,176 62,830 1,,,, o58,352 -7.1 /oINTEREST INCOME 12 7 `2 20,000 . -87.7% MISCELLANEOUS !Iliiipl$12,453,450 10,000 �' o OTHER FINANCING S 04,096[-,j:',:::::1 ' � -91.0/oOURCES 198,598 198,598 o 0. % 0 TOTAL TRANSIT FUND REVENUE _M�,+ ' 3 F4=fig �k n»`. 409,040 1,326,749 ���Y��rtkr�a�tq�y,,{�9gts��' ��at� -1.4°/ "'�P.... C.'•R6 MfL��hsi'x'7t��.3` � °�'�ilt��' O zztA......,at¢ :43 ��F$ '� -11 £7IS ;.�xwf Actuals ,:pg 7 ,T`, s ".77. Budget x' thru 12/2008 �104 i,'' '4(54,0-00140 szto Budget ADMINISTRATION 46,273 104,220 2.9% FLEET MAINTENANCE 28,514 69,926 0.0% OPERATIONS 192,093 536,783 0.0% RTA SERVICES 26,243 675,000 0.0% PERSONNEL SAVINGS g ;; s 4 TOTAL TRANSIT FUND EXPENDITURES 293,122 1,385,929 • -0.6% SURPLUS/(DEFICIT) (59,180) (69,213) G:\BUDGET ANALYST\Financial Reports 2008-2009\2Q\December FY09 Fund Update_Transit Fund.xls JPLLEYgp, 1k I I !kL,nIVIcly I c a .- z ,,.. FY2008/2009 1 :��. '--. December YTD Financial Status 4-0,,,vDE,A,,, Roadway Impact Fee Fund REVENUE � Actuals Budget Year End %thru 12/2008 Estimate to Budget FEDERAL GRANTS - 500,000 - -100.0% STATE GRANTS 467,445 3,561,500 1,747,816 -50.9% OTHER INTERGOVERNMENTAL 56,315 - 56,315 100.0% INTEREST INCOME 50,026 220,000 100,052 -54.5% MISCELLANEOUS 22,871 7,000 22,871 226.7% 0.0% OTHER FINANCING SOURCES - 9,300,000 - IMPACT FEES 292,685 843,750 506,250 -40.0% TOTAL IMPACT FEE FUND REVENUE 889,341 14,432,250 2,433,303 -83.1% EXPENDITURES Actuals Year End Budget cyo Estimate to Budget thru 12/2008 g ADMINISTRATION 101,557 - 101,557 100.0% DEBT SERVICE 31,500 225,000 31,500 -86.0% DESIGN 81,914 1,315,000 1,077,451 -18.1% CONSTRUCTION 4,892,371 20,205,000 7,362,304 -63.6% TOTAL IMPACT FEE FUND EXPENDITURES 5,107,343 21,745,000 , 8,572,812 -60.6% SURPLUS/(DEFICIT) (7,312,750) (6,139,509) G:\BUDGET ANALYST\Financial Reports 2008-2009\2Q\December FY09 Fund Update_Impact Fee Fund.xls elJp,1.LEY qR��O1: H I I H V r11V1 C I V i t '"''':;,,fr -=-=µ= December YTD Financial Status FY2008/2009 Ab;;;;,-,.. -,.. Stormwater Utility Fund REVENUE Actuals Year End ok Budget thru 12/2008 Estimate to Budget FEDERAL GRANTS 55,718 900,000 55,718 -93.8% STATE GRANTS - 300,000 - -100.0% INTEREST INCOME 922 - 1,843 100.0% MISCELLANEOUS 100 - 100 100.0% CHARGES FOR SERVICES 290,663 735,000 697,591 -5.1% TOTAL STORMWATER UTILITY FUND REVENUE 347,402 1,935,000 755,252 -61.0% EXPENDITURES Actuals Year End ok Budget thru 12/2008 Estimate to Budget PERSONNEL 70,959 159,982 159,982 0.0% OPERATIONS & MAINTENANCE 74,546 304,950 304,950 0.0% CAPITAL 156,008 154,579 156,008 0.9% DRAINAGE PROJECTS 2,654 1,200,000 - -100.0% OTHER FINANCING USES - 40,000 - -100.0% TOTAL STORMWATER UTILITY FUND EXPENDITURE: 304,167 1,859,511 620,940 -66.6% SURPLUS/(DEFICIT) 75,489 134,313 G:\BUDGET ANALYST\Financial Reports 2008-2009\2Q\December FY09 Fund Update_Stormwater Fund.xls • ,,p,,LEY,,,,2 Al IAl.MIVICNI V -et ht °`v 9_. , HnandalFY2008/2009 .: , December YTD Status A°UNDEO 141a Water Utility Fund REVENUE Actuals Year End oh Budget Estimate thru 12/2008 to Budget CHARGES FOR SERVICES 339,090 553,000 678,179 22.6% INTEREST INCOME 84,443 275,000 168,886 -38.6% MISCELLANEOUS 316,831 - 316,831 100.0% WATER SALES 5,337,847 11,547,900 11,622,778 0.6% TOTAL WATER UTILITY FUND REVENUE 6,078,211 12,375,900 , 12,786,674 3.3% Actuals EXPENDITURES Year End 0/0 Budget thru 12/2008 Estimate to Budget ADMINISTRATION 528,761 4,724,913 4,506,027 -4.6% METER READING & BILLING 557,258 1,089,238 1,089,238 0.0% CONSERVATION 56,523 137,374 137,374 0.0% WATER RESOURCE MANAGEMENT 1,197,739 1,557,325 1,557,325 0.0% CAPITAL IMPROVEMENTS 1,522,564 4,471,789 3,761,714 -15.9% CONSTRUCTION INSPECTION 75,348 148,460 148,460 0.0% PRODUCTION 1,090,882 3,170,285 3,170,285 0.0% DISTRIBUTION 455,075 930,339 930,339 0.0% TOTAL WATER UTILITY FUND EXPENDITURES 5,484,149 16,229,723 15,300,762 -5.7% SURPLUS/(DEFICIT) (3,853,823) (2,514,088) G:\BUDGET ANALYST\Financial Reports 2008-2009\2Q\December FY09 Fund Update_Water Utility Fund.xls 0 0 z r-0c°cn 07(A4, m o cnp <0rn Pap•4o o -, O r- n) 0 c o o �.cn.m o a :�o O O (D O (D Q 0 0 CD —.+ 0 a �� t L ' . ,....s O ai v =cD w . o o(� 3 it v (hD O O , . 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'.....:.,...;.• ...'11-.'...-'.'� Na-7t t t 7-, o •'l'........114'.1.?ff'...';•••.-t.'...;?::i'H' x (/) G[ ra Y ; v r +�-.. FAP#. • fA ki:. `i�67 �..�..:'''''''',..,',..(7,';'''''-'4::';,,',.-....-1'.' b�� :icat Fla rirt1Lt', Y`r ;'�ys Ise'' GD s4 r .f.',5:....1-''''''''',:.:;-1.;.:A1,:''''.0.''....'.:':..''.... v '''''..-1.-.':'t.-;!;.:,,;...;-...';' 'r •� tri 4YtI �Y .';'',,,."';:*:.44.:''''''... r.4.,.....,,,4,;,....,%,-,:c11''',...:',.:. i�,41j' ; i ��,� �f�t � ,� y t ryi H Mkt'Y��'y ,, fa,,L7,„;•, ?t cC TOWN OF ORO VALLEY Page 2 of 5 COUNCIL COMMUNICATION STUDY SESSION DATE: JANUARY 28, 2009 Total single family residential (SFR) building permits for FY 2009/10 are estimated at 100, or approximately 8 per month. This is down from an estimated 150 SFR permits anticipated for this fiscal year. Charges for services is anticipated to increase slightly to reflect increased fees charged for parks pa ks and recreation facilities and programs and for development review fee increases. Finally, interest earnings on Town invested funds are expected to remain low in the near term as interest rates continue at historic lows. Total estimated revenue in the General Fund for next fiscal year is $26.7 million. This represents almost a 4% decline from current year estimated year-end actual revenues of$27.7 million. Expenditures Total projected expenditures are $30.9 million and were prepared with the following assumptions: tions: • No new positions • No cost of living adjustments (COLA), merit pay increases, market adjustments, or step plan increases • 10% increase in employee benefit costs • Full year impact of FY 2008/09 merit/step increases • Reduced capital improvement plan (CIP) funding • Includes $500,000 funding contribution to the Capital Asset Replacement Fund • No increases to department operations and maintenance budgets With a projected deficit of$4.2 million, serious consideration will need to be given to both expenditure reductions and revenue generating options to close a gap of this magnitude. Options for Reducing Deficit Although not an exhaustive list of all possible options, ATTACHMENT B contains a combination of some program/service level reduction and revenue enhancement options for consideration in addressing next year's projected deficit of$4.2 million. This list shows some expenditures that could be eliminated from the budget and the resulting cost savings, as well as continuation of the 2% utility tax and the enactment of several new areas of taxation and the resulting estimated revenue that could be generated from those options. Options also exist for program and service level reductions townwide, including Parks and Recreation programs and at the Oro Valley Public Library. Utility Tax Renewal Should the Town Council wish to consider renewal or extension of the Town's current 2% utilitysales tax that t is due to sunset on April 1, 2009, the tax ordinance specifies that any vote by the Town Council to extend it must occur prior to April 1, 2009. There would be no need for a public hearing or delayed effective date on the extension under State statute since the Council action would be to extend an already-existing tax. If the ordinance were allowed to lapse and the Council wished to reinstate it on or after April 1, 2009, or the Council wished to consider an increase to the tax rate, then a new tax ordinance would be required and the TOWN OF ORO VALLEY Page 3 of 5 COUNCIL COMMUNICATION STUDY SESSION DATE: JANUARY 28, 2009 requirements of the State statutes would come into play, including the need for a public hearing and a delayed effective date of at least 30 days. Development Services Manpower Analysis Given the forecast of decreased residential and commercial development and the fact that the Town is 80% - 85% built out, staff will be working on a manpower analysis within the development services departments (Development Review, Planning and Zoning, Building Safety, Water and GIS) to determine the staffing needed in those areas over the next 6-24 months to handle the projects that are on the horizon, such as the Ventana Medical Systems expansion, build out of the Oro Valley Marketplace and the construction of the Rancho Vistoso Municipal Complex. Pending the outcome of this analysis, staffing levels could be adjusted to better reflect the projected needs. Future Years Outlook — General Fund The remaining forecast in the General Fund for the following four fiscal years was prepared assuming very modest revenue growth until after FY 2012 and into FY 2013 and 2014, when full economic recovery is anticipated. This forecast is consistent with the latest projections prepared by the State's Joint Legislative Budget Committee (JLBC). The expenditure projections over the following four years include the following assumptions: • Reinstatement of up to a 2.5% annual cost of living adjustment and up to a 2.5% merit increase per employee beginning in FY 2010/11; • 10% annual employee benefit increases • $500,000 annual funding for the Capital Asset Replacement Fund • Debt service payment on the Rancho Vistoso Municipal Complex beginning in FY 2010/11 • Flat operations and maintenance budgets Given these assumptions, the fund balance in the General Fund continues to decline each year. Therefore, a combination of revenue enhancements and program/service level reductions is strongly recommended to help ensure a financially sustainable budget over the next 5 years. HIGHWAY FUND FY 2009/10 PRELIMINARY PROJECTIONS The FY 2009/10 forecast for the Highway Fund and the four following fiscal years is shown in ATTACHMENT C. Beginning Fund Balance It is estimated that the beginning fund balance in the Highway Fund for FY 2009/10 will be approximately $3.9 million. This is down slightly from the current FY 2008/09 beginning fund balance of $4.0 million. Revenues Revenues in this fund are estimated to decline approximately 19% next fiscal year to $4.2 million from current year estimated actuals of $5.2 million due to both the slowdown in local development activity, which generates TOWN OF ORO VALLEY Page 4 of 5 COUNCIL COMMUNICATION STUDY SESSION DATE: JANUARY UARY 28, 2009 construction sales taxes, and the uncertainty of the revenues to be available from the state shared highway user (gas) taxes. Expenditures As in the General Fund, estimated expenditures of $5.2 million were prepared assuming no new personnel, no pay raises for staff, a 10% increase in employee benefits, and a budget of$1.2 million for thep avement preservation program. With a projected deficit of almost $1 million next year and continued deficits for the following four years, serious consideration will need to be given to finding additional revenue sources and/or reducing service levels or funding for pavement preservation to maintain financial sustainability in the Highway Fund. BED TAX FUND FY 2009/10 PRELIMINARY PROJECTIONS The financial forecast for the Bed Tax Fund is shown in ATTACHMENT D. Projected revenues in the Bed Tax Fund for next year assume a slight decline in existing hotel bed tax revenues, but include the full year operation of the new Wingate Hotel located in Steam Pump Village. Bed tax revenues are projected at $1.2 million for next year. Projected expenditures were prepared assuming that 1/3 of the collections (or 2% of the 6%) are allocated to economic development marketing efforts, and that the Hilton El Conquistador continues to receive a rebate of 2% of it's own 6% bed tax revenues through mid-FY 2010/11 when that agreement expires. A portion of the cost of maintaining the Naranja Town Site is also allocated to this fund and is projected to remain flat. Over the next five years, this fund is showing a surplus of funds each year that could be reallocated to the General Fund and/or the Highway Fund to help narrow the projected deficits in those funds. PROPOSED BUDGET CALENDAR The proposed budget calendar for FY 2009/10 is shown in ATTACHMENT E. This year for the first time, the departments will be trained to enter their budget requests directly into the MUNIS ERP system budget module, , rather than Excel spreadsheets, as has been used in prior years. We are hopeful that this will streamline the budget process, and that final adoption of next year's budget will occur in June, prior to the start of the new fiscal year on July 1St The budget meetings with the Town Council could occur earlier than the dates shown in the schedule if specific policy guidance is given to enact new revenues and/or reduce program spending in specific areas and revenue estimates and expenditure requests can be tabulated sooner. The exact dates and times of the Council budget work sessions will be coordinated between management and the Town Council. The Capital Improvement Program process will still continue as planned with the review and ranking of proposed projects in order to identify and quantify the Town's needs in this area. COUNCIL FEEDBACK REQUESTED The Town Council's feedback is requested this evening in several areas: TOWN OF ORO VALLEY Page 5 of 5 COUNCIL COMMUNICATION STUDY SESSION DATE: JANUARY 28, 2009 1. Whether reconsideration of the 2% utility sales tax should be placed on an upcoming Council agenda; 2. General consensus/preference on options proposed for addressing future deficits in General Fund and Highway Fund; 3. Specific budget information by department and program area that Council wishes to see during budget work sessions; 4. Whether Council would again prefer to hold an initial all-day Saturday budget overview session to highlight budget issues and program budgets; and 5. Any other direction/requests the Council may have. ATTACHMENTS 1. ATTACHMENT A — General Fund 5-Year Financial Forecast 2. ATTACHMENT B — Options for Reducing FY 2009/10 Projected General Fund Deficit 3. ATTACHMENT C — Highway Fund 5-Year Financial Forecast 4. ATTACHMENT D — Bed Tax Fund 5-Year Financial Forecast 5. ATTACHMENT E — Proposed Budget Calendar for FY 2009/10 j7i ,„/' id z 7 t c. / I,i Stacey Lemo -Finance Director 6,4 4 4„..." 1 A 4#,.,A,.4_, David Andrews, Town Manager 0 5 Year Financial F ATTACHMENT A ►:: orecast . . General Fund yy `Ci���1��7 L� �8 ri�:t X�'"._ Mrd, .-: : 4,'.';ji'^�.y'� ,..' �?.c.� .":.it♦ '.s ., .�r�.w .+... �•- c. .. S r�ct A f ° k r-�+ r `s*k� ;`: .. r y c:w w �e,�r �"•�Y.w._._.. 'w.- -. .. t t1.'. �',.'"Z1.�'r:.:. >�'- •.{.}'�. k..h.' � ti�� + _'�,`�$ ♦ ��q�q Y'4 k�2` `3( p �+� �: tt Edi. 1Td4;.�.:"C ��.:O.IK..✓ �?�,,��.M. -eery/jp��" 1 k`',�•A:.'. ' ITown Population 43,651 44,253 44,975 45,697 46,384 47,071 II- TliriRM�t.e . hv:.r I Tt,-,1f'pCa � aY..ral ..0i �t asi ' 'S4f-sy, a� R .�.',.ZY'�;;C•.�4E>iyAF�.r•e :w IMO: e tl ' C s e .,a. y��a�"vf i-4t �gt r.�f r�,g{-"It� !tt' �t 9'3 ivt �6 Z�e��-j...��'f'r�'s6 _^s,, a:,'f�'�E e{�F*t,.v9��fr�}y�},,.����'� i .rti s rd.... i";:>3:': k.SF•�� Jr i'. t4 ,�S ! 3 Local Sales Tax 12,676,170 13,317,056 13,950 856 14 246,691 14,745,644 15,783,438 State Shared Revenues 10,716,478 9,627,527 9,280,477 9,326,423 9,699,474 10,089,312 State& Federal�Grants 388,748 360,000 360,000 360,000 360,000 360,000 -Residential Building Permits 477,709 291,848 302,702 216,881 217,999 361 Residential Building Permits 629,100 460,000 460,000 615 000 77 ,600 0,000 925,000 Charges for Services 1,108,436 , 1,133,252 1,148,406 1,169,205 1,215,488 1,267,144 ,144 PCLD Reimbursement 620,083 626,284 ' 632,547 638,872 645,261 651,713 Interest Income 239,171 239,171 239,171 239,171 239,171 239,171 Other Revenue 886,442 632,203 I 636,879 641,556 646,007 650,457 Total Revenue 27,742,337 26,687,342 27,011,037 27,453,799 28,539,043 30,327,835 lir0*/th in Revenue(Net of Inflation) 3:8% 1.2% 1.6% 4:0%0 `p 1� =,,hYF • '``t 'yR!c;� 1,-tib`,' i ,, AltAlt,,? .. j R in S, .eYN .%.Vit sL -.n¢ ?�.d�1 L, Administration - Personnel 3,733,338 3,886,293 ' 3,886,293` 3,886 293 3,886,293 3,886,293 =Operations&Maintenance 2,632,283 2,402,283 ' 2,262,283 2,402,283 2,262,283 2,402,283 Capital 301,300 100,000 100,000 301,300 301,300 301,300 ' 6,666,921 6,388,576 6,248,576 6,589,876 6,449,876 6,589,876 Magistrate Court - -Personnel 662,431 662,431 ; 662,431 662,431 662,431 662,431 Operations&Maintenance 152,648 152,648 152,648 152,648 152,648 152,648 815,079 815,079 815,079 815,079 815,079 815,079 Public Safety -Personnel 11,045,188 11,045,188 11,045,188 11,045,188 11,045,188 11,045 188 t -Operations&Maintenance 1,535,413 1,839,912 1 1,839,912 1,839,912 1,839,912 1,839,912 Capital 589,000 216,000 , 216,000 216,000 216,000 216,000 13,169,601 13,101,100 13,101,100 13,101,100 13,101,100 13,101,100 Planning&Zoning - Personnel 1,228,958 1,228,958 1,228,958 ' 1,228,958 1,228,958 1,228 958 -Operations&Maintenance 383,500 158,500 ' 158,500 158,500 158,500 158,500 Capital 2,000 2,000 2,000 2,000 2,000 2,000 1,614,458 1,389,458 1,389,458 1,389,458 ' 1,389,458 1,389,458 Parks&Recreation - Personnel 1,172,346 1,172,346 . 1,172,346 1,172,346 1,172,346 1,172,346 -Operations&Maintenance 957,114 882,114 882,114 882,114 882,114 _ 882,114 Capital 62,820 62,820 62,820 62,820 • 62,820 62,820 2,192,280 2,117,280 2,117,280 2,117,280 2,117,280 2,117,280 Library Services - Personnel 844,789 844,789 1 844,789 844,789 I 844,789 844,789 -Operations&Maintenance 428,494 428,494 428,494 428,494 428,494 428,494 -Capital 36,700 36,700 36,700 36,700 + 36,700 36,700 1,309,983 1,309,983 , 1,309,983 1,309,983 1,309,983 1,309,983 Building Safety - - Personnel 1,315,671 1,315,671 1,315,671 1,315,671 1,315,671 671 t 1,315,671 -Operations&Maintenance 277,945 277,945 277,945 277,945 277,945 277,945 Capital 11,000 11,000 11,000 11,000 11,000 11,000 1,604,616 1,604,616 1,604,616 1,604,616 1,604,616 1,604,616 Development Review -Personnel 492,949 492,949 492,949 492,949 492,949 492,949 -Operations&Maintenance 30,276 30,276 30,276 30,276 30,276 30,276 523,225 523,225 523,225 523,225 , 523,225 523,225 Sales Tax Rebates 804,018 1,149,981 1,303,856 1,505,496 1,550,661 1,597 181 - 833,000 970,078 970,078 970,078 Municipal Operations Center - - . Capital Asset Replacement Fund 500,000 500,000 500,000 500,000 500,000 Fund Transfers 1,181,266 1,193,412 1,097,586 1,314,049 1,226,112 1,223,949 Total Expenditures 29,881,447 30,092,710 30,843,758 31,740,239 31,557,467 31,741,825 G•\BUDGET\FY 09-101Financial Sustainability\5 Year Stabilization Plan FY 2010_2014 xIs 1/21/2009 ''jj ``{{�� General fund ..S'.' Yry r� - .''r s y 'Amo,.,r x, ....,_ • ForecastATTACHMENT �Y_ L t.. p ca �- •,.s, ���;.�:;;�--���- ,�,�,.�� �.���'���� � 540, 30 . year Financial Fore 7 ,.;• t A} �,,tt: :• � � ,„4. � ,.:_ 1,438,927 , 5 ,� �,�'���r L� �� .` 9�������r�� '1,345,314 ..�. ,p. , '� -��� .��::.� S8 582 .. . �.� 823,419 1,258,582 '2 33 281,855 Costs 085 553 $ 32,996,395 $Increase in Employee C -- __ 32,102,341 $ 33, , 8'1447 $ 30,916,129 $ .. o �.���;����5�.�x.�`.6%'. $ 29,8 � �•� � T�TO G;��� __ 2.9°°. c,AH e n d itu res `������ : Adjusted Expenditures -`� • 0.7°l0 ,: , 2'�5 0 � 2 t of Inflation) q, x�:_ (4,457,351) (2954'0 Growth in a end�tures(Ne (5,631,753) 4 228,788) (5,091,303) (2,139,110) ��� t�. ���;_ztl �:�, �f�� � �� � Surplus/(Deficit) t�� ,- � , z R tom'. �� �+�t��Y - ^':s7”Y„ K'7`_ fi.=i f •�.V' t° .'•^', A.Y.i�w3lS.+ e �: ,`., t t t� �::;�. , a� % -23.5% t a: tE ai•��Ao 0) � �': �y. ,.. � �` -14.8 132*TIVIZITIALZWitali.:;.414,4:-AtiMirillagt; -e -��'c�� �k� ��� +�+Y��:�".�::>O'" t� os. °16.2/o -1.3% 0 3 3. 3 0 48.6 0 N e s . n R .. �n ... nt Y ... ::::::.:::.9:::........::;::::K::::::...i:i::::Z..:-:::::::g...Z...-..q.k:::::::::::::.:::..q.::::::.:::.:...:::,..::::::.....::::::::::::::::::::::::::::t;:i.::::::i.i......1..M: C .. .. 2 3 .... 2 6 .......... .. 2 941 1,247,477 Sources 1,217,366 1,232,941 4 954 2,524,026 Potential Revenue Sou 2 p% 1 201 792 2 465,881 2,49 Utility Sales Tax ° 2,403,583 2,434,732 1,404,229 1,454,608 Ut y .2 /0 1,239,277 Utility Sales Tax 1,304,808 2,909,217 Increase U ty 0 25% 1,223,037 2,609 617 2,808,458 Rent e ° 2,446,074 2,478,553 13 697 1,087,916 1,089,666 Local Sales Tax Increase 0.50/0 1,088,423 1�1 � 2 p% 1,079,743 395 510 2,426,350 2,455,301 Franchisecl Tax e(G &Comm.) ° 2,365,665 2, 1,316,744 2,484,25244,16 Fee Gas/Electric) 5.0/0 930,977 1,002,118 ( 4 p% 824,266 Bed Tax 1/22/2009 G\BUDG ET\FY 09-10\Financial Sustainability\5 Year Stabilization Plan FY 2010_2014 xls x ATTACHMENT ilitt r �,.,� ND OPTIONS FOR 7w�a y.. 7rsc uglykri7 .C;'yak?�;;,re••, N F .lt'k3` .yEJ^d td+�Y.i'n.?L iL' j 3.A'•c !h'f..1 �+� < Projected Revenues Projected $26,7Q0 Expenditures Projected 30 900 000 �ected Deficit ($4,200,000) Mana ement Recommendations: mmendat�ons: Defer Capital Outlay ($100K ��n Gen. Admin) $300,000 No Funding to CARF (Zero balance) $500,000 Use Bed Tax Revenueso (4/o of 6/o) 111,29pacn Revised Deficit ($2,200,000) Pi�Lons for Council Consideration: nsiderati• on: Renewal of 2% Utility Tax $1,200,000 Increase Utility Tax to 4% $2,400,000 Residential/Commercial Rental Tax $1,100,000 1/4 Cent Sales Tax Increase $1,200,000 Eliminate Out-of-State Travel $20,000 LiabilityInsurance ance Premium Savings g $100,000 Eliminate CommunityFunding ding $363,QQ0 Program/Service Level Reductions in Parks & Rec and OVPL $550,QQ0 Estimated Cash Reserves - 6/30/09 $14,500,000 Development Svcs. Manpower TBD Staffing Level Evaluations - Townwide TBD G:\BUDGET\FY 09-10\Financial Sustainability\5 y Year Stabilization Plan FY 2010 2014.x1s _ 1/22/2009 A ATTACHMENT C ,, Highway Fund 5 Year Financial Forecast ..:,i k4'S= ,'",,.5L40.:1.$-'0..'" :� n. .y � !.`>` .�i,.a•. �{�': ..�•t w�,yn>._ g.,o;,•� �;•yR s,,.,'l1�jtP, �p k� ,an_�.�'•' �M ��� .•.. 2o', r ° �1 fi r ' ':, 'r...`�f � ft ....ISsm�� It �`a c^ � � s ,. `' Town Population 43,651 44,253 44,975 45,697 46,384 47,071 t ..,.t. ;,•' .���:n. .pt.� _�a r 3' :�Pt%':�if'M't+�t yT+''','a»�a� a .i�X - tl rk�lr s .,C�' ` �' F i'r•r '•r:�rte�`,z 41,004-i'iM47::::::Bilf::: :,;'',41::;:i- 1P,71r;;t,,,:fi:;11.411'`Y.< � ✓� y, �..4:<_ �"3:°"'�'` '�. q.2';:. =0c L)� ,.v.r..s i� t -'w. �' 1. r'3>r..,a� nx( .'Se n�:.' t••}- u:.. ai`L� f t �- 1 11is .:b"` • �'M �<,!,t,. `O 9tt•A (?j��, )) t 1• .4 :1j�.w: R' M' - B :I. .`` t.', ` yq•l., `S:„ ryr. aeti 7s•u1 Z3 d Re��,Y l � 1s. 'ax�� .7:.it .��f�`'.��a-, da'�SA::3L:..v .saaw..��..i, s '*Y +}.+i'. "` 4-.�1.�'S..F .. '+£ ., .``{;G"• .'�:3:-`.x...ie'.'". t3•. .:."•r''..'ya,. ...t�.v'°,��i3`nktM�.'fi5'.$ li'il,:tt:WVIIVAIN.410;12.-611'S(lir�F�����a,sy t'��'4 ���`�S t��=t4`�..t`'�<'�+t tl��~g,�t`3`•t� a�'�:S�� J toy f t��iy��F7,Ftl.:3�j,t a'.t i�t'y�`^�� ... "nv.!t '�hh�...TA.�F.�r.'Dt ,Y .,tL_ r .,ft-a• t Construction Sales Tax 2,375,275 1,666,544 1,779,115 1 1,629,676 1,558,386 1,908,695 Highway User Tax 2,678,982 2,451,268 , 2,549,319 2,549,319 2,676,785 2,810,624 ~State&Federal Grants 77,274_ - _ - - - - Charges for Services 27,754 27,754 27,754 27,754 28,586 29,444 -Interest Income 79,664 79,664 79,664 79,664 _ 79,664 79,664 ` Other Revenue 13,015 13,015 13,015 13,015 13,015 _ 13,015 Total Revenue 5,251,963 4,238,245 4,448,867 4,299,428 4,356,436 4,841,442 Growth iri .e...ve...t....O([ite fi1 •Ad .._.... a X.... •f ....O.. ._.. / ......::..:..,...•, ._........... 5:10 �� :: .:: 3'4t - .. 1 3% . ::.�...a.... .� x......1. 1 t ;t� fit'., rr'', Personnel 2,335,039 2,372,047 ' 2,372,047 2,372,047 2,372,047 2,372,047 Operations 1,200,0441,200,044 1,200,044 1,200,044 1,200,044 1,200,044 Capital 60,700M 60,700 60,700 60,700 60,700 60,700 Roadway Maintenance 1,418,885 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 Equipment 100,000 100,000 100,000 100,000 100,000 100,000 ~Municipal Operations Center - - 527,000 613,723 613,723 613,723 Fund Transfers 229,632 228,272 _ 229,369 227,684 227,306 226,409 Total Expenditures 5,344,300 5,161,063 5,689,159 5,774,198 5,773,819 5,772,923 Increase in Employee Costs 59,998 I 147,081 I 157,391 168,530 180,573 Adjusted Expenditures $ 5,344,300 I I $ 5,221,061 $ 5,836,240 $ 5,931,588 $ 5,942,350 $ 5,953,496 I Growth,in ExpenOtu s' et,Of_nflation) . ''.!:•:;3.4c4/0' 10.0. ° .1:::5 ..._% .0/o ': .2°/ , 0.0% 0 Surplus/(Deficit) (92,336) (982,815) (1,387,374) (1,632,160) s (1,585,914) (1,112,054) keitiV:':14001*Vtat';*,41476a44M:%, :4111 .t. .�r....3 ,.:3 � s .1-_..,,:r.. S ,....2a.., ,. -k :vF. M.4iiyr' `�n' i.. Y' �" L'>'.: r.«3� „? -�.N. � t '»^ ..,! 0 �,�w.�.f ;C`.:' �•� :.:-r: ,�•5 .. y'w t� _.fie, .;SZ �,•».=4` V ,Cd7...• :i.,i. "n�`-r i -i. `F,`. O Ms t . "<�- ''a -i t �.,r 1' tJ' SQ'CG �`�•rSy ,�,.1�{W':.�` � Co-..',��,.` i7.R t'.... �. �•� ,r aa' ..�.,} 7 -V' :I��'tR.•�_k`. .. ..t:'-.:• ..,. `�`wa-" ..�aa t .... '1!•.�'�2��� ��:1�1'��:ry^'t�aox�•t'� .�'t�.?%�•`v }<•kS',^^":.„rC. ."J:..•.t rr7��1�� ._ e '}i:1n�..'� :shy"��Y.F '"Y' .a �s���'• , gaitilliglii.g.iligil:Hgoitnnii.:iiimigiotpiiilioilpiggi:iigiiill:blEgglEml.;21.g.EINEEEE.:111Ip.Em,:!!!!!!!!!!!!!.;.:1.!!!!!1:::::::.itil!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!.,:!!!-;:!.1!.:i!ii.1!!!!!!!!.: Potential Revenue Sources Rental Tax 2.0% 1,079,743 1,088,423 1,113,697 1,087,916 1,089,666 Franchise Fee 2,365,665 2,395,510 2,426,350 2,455,301 2,484,252 _ Bed Tax 4.0% 824,266 930,977 1,002,118 1,316,744 1,424,186 G_\BUDGET\FY 09-10\Financial Sustainability\5 Year Stabilization Plan FY 2010_2014 xis 1/21/2009 5 Year Financial Forecast ATTACHMENT D -: . - . . ,,. . Eked Tax Fund i Y a)-�<� tS'`A�>. 2��X",t'�;f',. ,-:, ��e °y�l�' .V-7,7:1.,„.. v L'`r�. t roe- �ttj.s�S f 'd��'+p`•�•e�.» :r'�i4,y,tan- '-ro6:c "q.. > .'. fig• a.-. r 1 2' : ^x : , vY;.�1'�i°.. .. t .> � C p f ,+..�- ! '!i�5 a e,� S;r '. as:L� � cv�'«,aE�:.. ,��k���s>�utii�..t.:ax� 'k:".,.`• .. +>u.'•>:a'��.�,r«r..�S•.�'i�� c� � �,�t Town Population `__ . 43,651 44,253 44,975 45,697 46 384 47,071 n • 1Her��i 4, �t'�E�� Y..s� '• t.fi f ��Ye. uv.r � E LTE.:tm. ..:t..�.. .7:7yili"'77 2 L 6 k•yy't Ail,l; r• t t Y>. si'i Local Sales Tax- Existing Hotels 989,409 969,621 969,621 969,621 998,709 1,028,671 New Hotels 88,926 ----� 266,778 426,845 533 556 976;407 1,107,609 Interest Income,- 13,597 13,597 1 13,597 13,597 13,597 13,597 Total Revenue 1,091,932 1,249,996 1,410,063 1,516,774 1,988,714 2,149,876 Growth in'R v nU 1 o/ 1.,:.:: ....�... e e e Net.of lnflat�o .. �>~�:.::.�:..,a;:...:.,,:,.�: � .:... 3 ° � 8.1 4SS: G'� a�r ai�"'�' .. w •t •� t Economic Development 339,274 416,665 470,021 505,591 662,905 716,625 Sales Tax Rebates 319,381 312,994 156,497 : - - - Parks&Recreation 54,766 54,766 54,766 • 54,766 _ 54,766 54,766 Total Expenditures 713,421 784,425 681,283 560,357 717,670 771,391 Increase in Employee Costs 860 2,114 _ 2,262 I 2,422 2,595 I Adjusted Expenditures $ 713,421 I I $ 785,284 $ 683,397 $ 562,619 $ 720,092 $ 773,986 1 0(001..rt.:»Ex enditures.,:(Net of.Inflation) v '''''''''!''.'21.3.:•1%'7"'''' o iiiii-:�:x::..;.,..•::::::,,::4:.::. �....... .......�..,...... 10.0!o -1�.7/o ... 28 1°lo �_..,��...:��`°�'''Is`��'j 7.5%. Surplus/(Deficit) 378,511 464,712 726,665 954,155 1,268,622 1,375,890 I:7V-;;;;(i• C1 ke^ :.... ..�.»- ^:ac ,::':-.1;;,,,: '''. • �.. '.'.. ,..4t". C .t 3 . .;..xs .}:igi �y n. _, �%`�ai r, `�'A+°;'q`w'.� r . �8" _...v�:.. .. ... ._. .. �:� ... :..t.G.:a:�1^`&.�° "`;.. •.�sf.���l����-..._!�Ra`'at •.F'.,�.�35. �'; ` .+"i,.��`.C ,aL'$d ���tC.�3S.a�s +..'.eg-,., I G-\BUDGET\FY 09-10\Financial Sustainability\5 Year Stabilization Plan FY 2010_2014.xIs 1/21/2009 ATTACHMENT E Town of Oro Valley Proposed Financial Planning Calendar v. FY 2009 — 2010 AUGUST 2008 SEPTEMBER 2008 OCTOBER 2008 NOVEMBER 2008 ' ... 1 trot,ii,` .. Std i'Q 1 -�t2 3 4 5 1 2 3 Vilil� 4 5 6 7 8 „,,,4.,?;-, 8 9 10 11 12 6 7 8 9 10 3 4 5 6 7 iv r� . .t 11 12 13 14 15 . z zar15 16 17 18 19 13 14 15 16 17 10 11 12 13 14 � .=<y ”" 22 23 24 25 26 20 21 22 23 24 17 18 19 20 21 '4.4,��;; 18 19 2 0 21 2 2 ,� 1..,4 �`, il£� 29 30 27 28 29 30 31 24 25 26 27 28 Y!_ 25 26 27 28 29 1;s,+f pr 1,. itiai ;.,.',.4:1 tkiii MIS ,' DECEMBER 2008 JANUARY 2009 FEBRUARY 2009 MARCH 2009 ',r, ,1 ,----.3i 7,7:--:=,14 F'', 0,-7Rr 3 ,•'t.,,1£}--':. - ` - �t''`' } a�;, titi,,i 12. 3 4, 5 1 2 2 3 4 5 6 2 3 4 5 6 l,,N is ;�( 8 9 10 11 12 6 7 8 9 9 10 11 12 13 9 10 11 12 13 ; 'l" a 4 13 14 15 16 16 17 18 19 20 16 17 18 19 20 !,.t..:„,. � .aa 15 16 17 18 19 � t i 22 23 24 25 26 19 20 21 22 23 24 25 26 27 23 24 25 26 27 iiii WI 29 30 31 26 27 28 29 30 30 31 ap f r APRIL 2009 MAY 2009 JUNE 2009 JULY 2009 apt»`r•,•p!tp�eY.Ell S''':i„wty e y�y,`tt.. 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't -,;•,,:..:'.•,..,1<1 1.3�...'^ �N 'o•5 jivn.•F." ^� Fa dSrw. ,.q � :lictiVz.'-"NTErrs'iiirrAgtra) g'•T ','34-',Y, Q1Jw,6 ��Mr : -1�i £ F9�'.m : ml .i s1�>1� u.�1"+,x3dC" •� - ih�,'4fV6` � R4 •ia.�{`�4ts�r,Yrkr. .� .�4�livrLuY.a � eS�, 9•,_•*'17�".° � t�U�e �4h '�..iA••.� £« .. �.:- �1s42:�y��i'�� fia�-' �`�41;�'sCTw 'ryS � aeX,• a ,ie , Sa ,1HdY�bi: November 1, 2008 CIP request forms distributed to departments q December 19, 2008 CIP department requests completed and submitted to Finance January 5 — 16, 2009 Prepare FY 2008/09 mid-year financial status update January 5 — 30, 2009 Conduct MUNIS user training and prepare budget instructions Council Study Session on mid-year FY 2008/09 financial status January 28, 2009 and 2009 10 FY review budget process p / 9 Distribute budget instructions to departments and open MUNIS January 29, 2009 for data entry TBD CIPTAC meetings to present department projects New Personnel and Employee reclassification requests due to February 20, 2009 Human Resources TBD CIPTAC ranks departments project requests February 27, 2009 Department budget entry deadline into MUNIS Finance Department reviews and analyzes departmental budget March 2 — 13, 2009 requests March 6, 2009 Draft CIP presented to CIPTAC Employee staffing, compensation and benefits analyses due to March 9, 2009 Finance from Human Resources March 13, 2009 CIPTAC finalizes CIP and recommends for Council adoption March 16 — 31, 2009 Town Manager's budget reviews with Departments April 1 — 10, 2009 Finance Department assembles Town Manager's Recommended Budget April 7, 2009 CIP •resented to Planning & Zoning Commission G:\BUDGET\FY 09-10\Budget Calendar FY2010.doc 1 ATTACHMENT E Town of Oro Valley Proposed Financial Planning Calendar FY 2009 — 2010 J 2y, C,-“k �'+i 7:^ �* t� ;"l � f k u .._....... ...... '. ...•^)4. .L r....:tl.ytrl t-�WI...... _ .. :t t .. _ r 11 April 13, 2009 Deliver Town Manager's ._. . ... ... _ ._..._ .,.. :: _. budget to Mayor and Council, and Finance and Bond Committee Saturday, April 25, 2009 Council Budget Work Session w/Departments (9:00 AM — 4:00 PM April 27 - May 15, 2009 Council's Budget Work Sessions (Includin9 Finance and Bond Committee — Exact Dates and Times TBD May 18 - 22 , 2009 Finance prepares budget packet materials for delivery to Town Managers office Ma 22nd packet distribution date June 3, 2009 Adoption of Tentative budget and CIP June 4 — 5, 2009 Finance prepares budget packet materials for delivery to Town Managers office June 5th packet distribution date • June 5 & 12 2009 Auditor General Statements published in Territorial Newspa per June 17, 2009 Adoption of Final budget and CIP July 20, 2009 State im posed deadline for adoption of Tentative budget G:\BUDGET\FY 09-10\Budget Calendar FY2010.doc 2 1-,'"i•:,.':-.'-'4,4,-.••••,- tt .. to a .�,r x'' "i ., s.A%4 ' m r-t rt tine 1:),,,. -•-•,..< .,‘„,,,,,,,,,,,,..,,,,,,A,,,,,,..,„ S ) -+ sC y,'�ff ,ys�i�My �r:sr r f"�tr.}�gg,,���'„y}- n a 3�.�`'3 ” r.,. �`�' �e,,,� r ak':�`�",�4'�x�sx��5'���',s��a� �t� +f�J�,a 4��� 3 �} s -+t'E',��"''a �s +, �il'�"YR�����"'S�Lr�?h�t�'3'�kd�,�r��f' 1"n *'2 w YM*`"d"d�af 'fir �"v�" , n.D Y�".1 r a 00 -in C w 0..... si) a) co III‹c w CD (1,) ....1 ,‹ r....1.- $1, N) "1 r Co V —0 IIVN) -/S 0 CD °(c) (I) to < .......... ....... • N.) , isiii, .,, .. , ,.,._,,. , CD ° Co....% , , , , , • .„. ;.. _ ,....,,,L, i . -L-4,1 ,,'..): t: As ter. , ') . . 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W :;, 0:: -• (.0 ....1 CD (I) C O CO V) .. = CD = -h C CD oCD 0 0 c 0 } 4 j bJ,F e x� .,r,l� �y��',g'y4"4t�.a�''t2�Kr,^rt(ad ,r`'•^�s �Ur'#✓�n 6 5 s t r s,s :��T f rr ,� fs,r4 Yx�t�4��1 a{a��A err Va �l�$tjr�R�j�, til ry'y4`fG ac�S�.�Ay M1 • • ' s j�f_r f3 , b✓{b,�K r ��iA� ����,at x�'«�"k�e'3{��,Y°i , . re't4 tiy. r. a 5 t� r}Yrk i M SAF 111111011111111.1' . , „ , •t , • -4 ea a. r 'h,, e4 • ;r. 3.� 11111111111-1 01) 4,: „,. . ti TOWN OF ORO VALLEY Page 1 of 1 COUNCIL COMMUNICATION MEETING DATE: January 28, 2009 TO: HONORABLE MAYOR& COUNCIL FROM: Amanda Jacobs, Economic Development Specialist SUBJECT: Economic Development Incentive Policy Guidelines for Professional Level Job Creation SUMMARY: On September 10, 2008,the Town Council was presented with a draft Economic Development Incentive Policy Guidelines for Professional Level Job Creation. The purpose of the policy is to encourage professional level employment in the Town of Oro Valley, resulting in the diversification of the community's employment and tax base. During the study session, Council provided the following feedback: 1. Jobs credits for Oro Valley residents (Council Member Paula Abbott and Council Member Salette Latas) 2. Road improvements (Council Member Barry Gillaspie) 3. What are other communities doing? (Council Member Paula Abbott) The purpose of this agenda item is to review the updated draft economic development incentive policy. ATTACHMENTS: 1. Draft Economic Development Incentive Policy Guidelines for Professional Level Job Creation 2. Attachment "A": Agreement with Lockheed Martin to locate Flight Service Facility in Prescott Valley 3. Attachment"B": Development Agreement between the Town of Marana and KIMCO Barclay Marana, L.P. 4. Attachment"C": List of Economic Development Incentive Guidelines from other Arizona Cities and Town manda Jacobs, o •mic Development Specialist David Andrews, Town Manager TOWN OF ORO VALLEY ECONOMIC DEVELOPMENT INCENTIVE POLICY GUIDELINES FOR PROFESSIONAL LEVEL JOB CREATION Goal To provide the Oro Valley Town Council (Council) and Economic Development Division p staff a set of policy guidelines that outline the possible use of incentives to encourageprofessional in g level employment in the Town of Oro Valley (Town), resulting in the diversification of the community's employment and tax base. Targeted Industries Business sectors outlined in the 2007 Oro Valley Comm./fiftyeconomic Development Strategy •-- .-p (CEDS) and the Focus 2020: Town of Oro Valley General Plan (General Plan, should be the primary considerations when consiPlan) dering incentives to:,stimulate:and encourage economic conomic development within the town. The following sectors are outlined :CEDS and the Plan: 1. High-Tech/Bio-Tech a. High-Tech sectors include: aerospace techrAo � biotechnologyp information technology, nanotechnology,pharmaceuticals and robotics. b. Bio-Tech is technology based:on biology, es ecially when used in agriculture, . gy p g iculture, food, science and medicine. 2. Tourism/Resort/Convention Facilities 3. Hospital and medical,,,facilities Targeted Development Criteria In certain cases, at the discretion of'the,Council,the Town ' may consider using incentives in order to attract or retain targeted industries capable of generatingprofessional level ::.•::: employment to the community. Aprofessional leveljob is defined as a job that pays above the prevailing -- --.- J p y p wailing median wage and offers full_em to `ee:,benefits includingmedical p -y employer-paid medibenefits, vacation and sick pay. These,incentives will onlybe usedobjectively when the Town can obi demonstrate that the addition or expansion of the business would result in level increasing the professional level employment of the Oro Valleyecon.om . The ' y following policy guidelines shall be considered prior to the offering` of economic incentive : s. 1. Business attraction or expansion ro'ect.s that add at leastjobs p p .l 20 quality in the targeted industries mentioned above. A quality job is defined asq y a job that pays 10 percent above the median wage rate in Oro Valley (currently $68, ) and the employer offers full employee benefits, including employer-paid medical900 x 1.1 benefits, vacation and sick ' or pay' 2. Business attraction projects that bring a unique and needed roduct or service to the e Town of Oro Valley, which creates jobs and generates significant sales tax revenues; or 3. Recreation or tourism development projects that add needed recreational amenities for both the resident and the visitor. 1 Each project will be evaluated on an individual basis by the Oro Valley Town Council. Changing economic conditions and availability of funds may cause the Town Council to modify, amend, or discontinue any economic development incentive program. Should an incentive be discontinued, the Town Council will honor any incentives committed to before the discontinuance of the program. Policy Guidelines A. Fast Tracking The Town recognizes that time is extremelyimportant in the planning and scheduling of p business recruitment and expansion and the hiring of new employees,. To that end,the Town will undertake the following• 141 •.. a. Project Teams ��'��```' '' `' The Economic Development Division will form a project ect team from the various departments that will work on the project. The purpose of the project team is to assist the applicant through the Town's development review and approval process. b. Planning and Zoning Reviews`: ., with current zoning will be expedited, at the i. Projects in conformanceg applicant's request, for processing through appropriate procedures. ,.•... ii. Submittals that must have Development Review Board (DRB) and Town Council approvai,if in substantial compliance with code requirements, will be scheduled for the next available public meeting. •111. itcomplice review of building permits, grading plans, and other reviews not requiring board review, will be processed consistent with procedures outlined within this policy. iv. Tentative development plans and improvement plans may be processed p .•..,.. concurrently for projects in conformance with fast tracking criteria. c. Plans for Public Improvement A Type 2 gradingpermit is a permit required for site construction of any new public Yp or private street or roadway, a commercial, office or resort project, or any new residential development consisting of more than two platted lots. An expedited plan review for Type 2 Grading permits shall be made available at the request of the developer, providing the project meets targeted development criteria and the associated Development Plan has been recommended for approval by the DRB. Upon making complete and formal submittal, the plans shall be processed according to the following time lines: 2 i. An initial expedited plan check shall be completed by all reviewing departments within twelve working days for non-complex facilities under 60,000 s.f. and/or five acres in site development size. Seventeen working days shall be required for complex facilities or facilities over 60,000 s.f. and/or 5 to 20 acres in site development size. Sites greater than 20 acres in size shall require a minimum of 20 working days for plan check completion. ii. The first resubmittal of plans shall be completed by all reviewing departments within twelve working days for non-complex facilities and seventeen working days for complex facilities. All subsequent resubmittals shall be completed by all revieing departments within seven working days for plans addressing 20 or less staff generated comments. Plans addressing 21 or more staff generated comments shall be subject to original review time duration. ,:ti?? iii. Town staff shall also coordinate comment review meetings help aid the developer and it's consultant address and:mitigate open review„issues. d. Building Permits WIMP ;.; An expedited plan review for buildingpermits shall:be made available at the request of the building owner. Upon makin complete a lication for building� p pp p ermits the plans shall be processed according to the followingtime lines: i. An initial expeditedplan check shall'►e`com let p p ed by all reviewing depaents within twelve working days for non-complex facilities under 60,000 s.f. and seventeen working days for complex facilities or ci ities over 60,000 s.f. ii. Tie first a resubmittal of lns shall be completed p p by all reviewing departments within t: elve working days for non-complex facilities ..: p under 60;000 s.f. and seventeen working days for complex facilities or p over 60,000 s.f, All subsequent resubmittals shall be completed by all reviewing departments within seven working days for non-complex facilities under 60,000 s.f. and twelve working days for complex facilites or facilities over 60,000 s.f. The Town will provide next dayinspections on all inspection p p on requests called in prior to 3:30 p.m. After hour and weekend inspections p shall be Fade available at the building owner's request. 3 B. Job Credits and Fee Waivers It may be an option of the Town Council that a job credits and fee waivers program be established in the Town of Oro Valley with the following provisions. a. Job Credits i. In order to qualify for job credits, an employer must agree to create and maintain not less than 20 new full-time jobs or the number of new jobs upon which the credit is based, whichever is greater, as follows: . 1. An employer, as defined above,that obtains a building permit for new construction within the Town,will be eligible for job credits. The employer will receive $1,000 per full- me employee who . lives in the town of Oro Valley. The maximum job credits shall not exceed $100,000 per parcel or project. 2. The business will enter into a five-year formal written agreement with the Town and will agree to the conditions and requirements for the job credits. a. After eachy ear, the employer will receive $1,000 per full- time resjdent employee, once they show the new employee has been with the company for one year. 3. The employer receiving the job credits shall submit an annual report to the Town on the number of full-time employees on the anniversary date of occupancy. The Town shall have the right to review such company records a's is necessary to verify compliance. Temporary jobs,raroart-time jobs, or seasonal jobs shall not be part-time eligible for job credits. (See Attachment A: Agreement with Lockheed Martin to locate Flight Service Facility in � , Prescott Valley) b. Public Infrastructure Improvements Themay Town offer incentives or cost-sharing for public infrastructure improvements that have a direct relationship to public benefit. Improvements includingstreets, water lines, traffic signals, storm drainage, parking structures, and :.. similarublicl,. `assessed improvements are examples of public-private financed p Y incentives. (See Attachment B: Development Agreement between the Town of Marana and KIMCO Barclay Marana, L.P. Any incentive or cost-sharing agreement shall meet the requirements of the Arizona Constitution prohibiting gifts or subsidies of public monies to private entities. 4 Attachment "A" ---- ----- TOWN OF PRESCOTT VALLEY REQUEST FOR COUNCIL ACTION Date: June 30, 2005 SUBJECT: A eement with Lockheed Martin to locate Flight Service Facility in Prescott Valley SUBMITTING DEPARTMENT: Management PREPARED BY: Greg Fister,Economic Development Manager AGENDA LOCATION: Comments/Communications❑,Consent Ej,Work/Study❑, - New Business®,Public Hearing E], Second Reading❑ ATTACHMENTS: Draft Employment Agreement S[;iM11ZARY/BACKG ROUND: Lockheed Martin was awarded a federal contract on February 1, consolidating 58 Automated Fight Service Station (AFSS) sites across the 2005, which included c g country into ► • 20 facilities,including three sites designated as hubs—Fort Worth, Texas, Leesbur g, Virginia and Prescott, Arizona. a lack of space at the current AFSS facility in Prescott, the Lockheed Martin Initially, because of p 4ea). .a facilit outside the uad-city area (including the Phoenix With staff began searching for y q the Prescott '' Valley Economic Development Foundation taking the lead and working hard to retain and attract these high-paying jobs (and after discussions with Town staff)) Lockheed Martin located a buildingin Prescott Valley that fits its needs and made the decision to locate hubs to Prescott Valley. At peak operation, the 50,000 square-foot facility one of three national y on Valley Roadexpectedemploy ' ilit is to em to about 300 persons and will include a training f c y to be used by Lockheed Martinemployees em to temporarily assigned here to learn the operations lof the new p computer systems. attraction of jobs of this caliber warrants an Agreement witht Lockheed Town staff believes the whereb the Town will make an incentive payment tied to the number and quality of'obs Martin y located at the new Prescott Valley facility. Both the Prescott Valley General Plan 2020 and Focus Future II encourage efforts to attract pursuit higher-paying jobs to the community. In of those goals, staff has negotiated the attached draft Employment A eement with Lockheed Martin with the following highlights: > the Town a will payperformance-based incentive of$300 per qualified full-time job per cap $1,500per year with a of job during the term of the Agreement. A qualified job is one that offers employee and familyhealth insurance and base pay exceeding by 20%the averagepCounty wage Yavapai as determined by the Arizona Department of Economic Security, Research Division. The most current information from DES pegs the average , per County wage at $14.59 hour. A 20% increase over that average would result in an hourly wage of$17.50 per hour, or just short of$36,500 annually. g 1 > Lockheed Martin will locate its regional center in Prescott Valley and provide at least 200 full-time equivalent jobs annually over the term of the Agreement. ➢ The Agreement runs five years. Lockheed Martin employs about 130,000 people worldwide and reported sales of$35.5 billion in 2004. OPTIONS ANALYSIS: The Town Council may approve the Employment Agreement as drafted, suggest modifications prior to approval,or decline to approve the Agreement. ACTION OPTION: Motion to approve the Employment Agreement with Lockheed Martin,OR Motion not to approve the Employment Agreement. RECOMMENDATION: Because of the tremendous economic impact the importation of these new higher-than-average paying jobs will have on the entire quad-cities area, Town staff recommends approval of this Employment Agreement with Lockheed Martin. FISCAL ANALYSIS: If 300 qualified jobs are operating out of the Prescott Valley facility from the first day of operation (unlikely), the Town of Prescott Valley's maximum financial exposure would be $90,000 for five years or$450,000. In return,the quad-city area retains the positions currently being held by FAA employees at the Prescott airport and many more will be added. This facility's financial impact in the quad-cities is estimated to be $35 million to $40 million a year at full operations. The training center alone is estimated to have an economic impact of more than$1 million annually. • REVIEWED BY: / /� Management Services Director i,, ,��,` 'own Clerk i 4A. / A,; ,A Town Attorney �-- Town Manager ' -t,tri/vv),..Th avtliavo.'14 * COUNCIL ACTION: • ❑ Approved ❑Denied ❑Tabled/Deferred D Assigned to • • 2 EMPLOYMENT AGREEMENT T AGREEMENT (the"A reement") is entered into this 30thday of THIS EMPLOYMEN g e 2005, byand between Lockheed Martin Corporation, a corporation of the State of June, . . • Maryland (the "Employer"), and the Town of Prescott Valley, a municipal corporation of Mary Arizona(the "Town"). RECITALS A. ARS §9-500.05 authorizes Arizona cities and towns to enter into development agreements with propertyowners regarding (among other things) dedication of land for public purposes, phasingof development, and financing of public infrastructure and subsequent p reimbursements over time. B. ByResolution No. 1044 (October 4, 2001), the Town and the Prescott Valley the "District") entered into a Water District (a community facilities district of Arizona, development agreement with Prescott Valley Commercial Development Group, L.L.C. (a limited liability company of Arizona formed on May 23, 2001 to develop commercial/industrial buildings within the Town, the "Group") for the Group to construct one or more g on a parcel commercial/industrial buildings of land located within the Big Sky Industrial Park beingmore fullydescribed in Exhibit "A" attached hereto and expressly made (the "Property", and for the Town and the District to provide economic incentives to the Group a part hereof) with resect to the u -frontgovernmental costs of developing the Property (i.e. to pay the cost p p ' ' the Group, for certain off-site improvements that would otherwise be the responsibility of delay p pp the final application of certain Town and District fees and charges, and cap those fees and charges). C. The Town has an interest in the Group finding an occupant for the Property which will provide new employment opportunities for Town residents. D. The Town's General Plan 2020 notes in Chapter 9 "Economic Development"that "the limited data available indicates that wages in Prescott Valley are considerably lower than those in Arizona" and that "efforts must focus on attracting higher paying employers" (§9.3 "Looking Towards 2020"), and includes as a Guiding Principle that the Town should "promote an economically diverse community, committed to raising the standard of living for its citizens through enhancing the quality of life for the community (ED-A). E. PolicyED-Al.1 within Goal ED-Al of the General Plan directs the Town to "continue to demonstrate strong leadership in attracting new industries". F. Goal ED-A3 of the General Plan encourages the Town to "foster a strong and diverse economythat provides a full range of employment and economic choices" and, within Goal, PolicyED-A3.1 directs the Town to "plan for additional industrial, commercial and that . office uses to meet the needs of the population and to complement the character of Prescott " PolicyED-A3.2 commits the Town to "encourage investment in the development...of Valley", . , �� urban land and buildings for employment...opportunities , Policy ED-A3.4 commits the Town g 1 to "encourage the growth or relocation of industries that generate local tax and employment advantages", and Policy ED-A3.6 encourages the Town to "develop and maintain an economic development strategy plan for long- and short-range marketing.efforts focusing on the creation and expansion of diversified employment opportunities". G. Policy ED-A4.1 within Goal ED-A4 of the General Plan encourages the Town to "promote business, economic growth, formation of capital and the creation and selection ofjobs in designated commercial, industrial or employment areas". H. Goal ED-A5 of the General Plan directs the Town to "position Prescott Valley as a leading technology industry center in rural Arizona". I. Within Goal ED-A7 of the General Plan; Policy ED-A7.1 commits the Town to "promote and pursue industries and businesses that are.environmentally safe", and Policy ED- A7.2 directs the Town to "encourage...clean, non-polluting and comparable industries to locate in the Town". J. The Employer has indicated an interest in locating within Arizona and Prescott Valley a regional center and national training center which would provide approximately two hundred (200)new full-time equivalent higher-paying jobs relating to new technology. K. The Arizona Department of Commerce has offered the Employer certain training grants and tax credits (related to an enterprise zone) to encourage the Employer to locate in Arizona. L. The Town desires now to encourage the Employer to locate its regional center and national training center on the Property. M. ARS §9-500.11 authorizes the governing bodies of Arizona cities and towns to appropriate and spend public monies for and in connection with any project, assistance, undertaking, program or study, including acquisition, improvement, leasing or conveyance of real or personal property or other activity, that the governing body has found and determined will assist in the creation or retention of jobs or will otherwise improve or.enhance the economic welfare of the inhabitants of the city or town. . N. The Town desires to enter this Agreement whereby the Town offers. to the Employer a job performance-based incentive of three hundred dollars .($300.00) per qualified full-time equivalent job per year with a cap of one thousand five hundred dollars ($1,500.00) per qualified full-time equivalent during the term to locate its regional center and national training center on the Property. 0. The Town Council expressly finds and determines that providing this job performance-based incentive to the Employer to locate its regional center and national training center to the Property will assist in the creation of jobs and will otherwise improve or enhance the economic welfare of the inhabitants of the Town. •• 2 • P. The Town Council also finds that a'public purpose is served by this Agreement and that the public benefit to be obtained from encouraging location of the Employer's regional • center and national training center on the Property is not far exceeded by the consideration being paid by the public hereunder, and that this Agreement is otherwise consistent with the health, safety and welfare needs of the community. Q. The Town Council further finds that this Agreement is consistent with the Town's General Plan 2020 pursuant to ARS §9-500.05(B). NOW, THEREFORE,the parties hereto agree as follows: AGREEMENT • ARTICLE 1. DEFINITIONS The following terms shall have the meanings set forth below whenever used in this Agreement, except where the context clearly indicates otherwise: 1.1. Full-Time Equivalent Job -- any number of employees hired to work a total of forty(40)hours per one-hundred sixty-eight (168) hour period. 1.2. Qualified Job — any employment which offers employee and family health insurance and base pay that exceeds the Yavapai County average by twenty percent (20%). • ARTICLE 2. EMPLOYMENT PLAN 2.1. Duration of Agreement. The term of this Agreement shall continue and exist from the date first-above written through September 30, 2010,unless sooner terminated by either party upon twelve(12)months prior written notice to the other party. 2.2. Employment by Employer. The Employer shall.locate its regional center and. . national training center on the Property and provide at least 200 -full-time equivalent jobs annually on the Property over the term of this Agreement: 2.3. Town Economic Incentive. .The Town shall pay the Employer three hundred dollars ($300.00) for eachQualified Full-Time Equivalent Job provided by the Employer and filled forat least six (6) months each year on the Property during the term of the Agreement. A cap of one thousand five hundred dollars ($1,500.00) shall apply to the Town's payment for each Qualified Full-Time Equivalent Job. Payments shall be made for the prior year from the anniversary date of this Agreement within forty-five (45) days after verifying information received from the Employer as set forth herein-below. 2.4. Failure of Timely Performance. In the event that either party hereto fails to perform any of its obligations which are set forth in or contemplated by this Agreement in a timely manner, and should such failure not otherwise be excused by agreement of the parties or • 3 by the terms of this Agreement, such failure shall be considered to be a breach of this Agreement and the nonbreaching party shall have their respective remedies set forth in Article 6, below. 2.5. Manager's Power to Consent. The Town hereby acknowledges and agrees that any unnecessary delay hereunder would adversely affect the Employer and its performance under this Agreement, and hereby authorizes and empowers the Town Manager to consent to any and all requests of the Employer requiring the consent of the Town hereunder without further action of the Town Council, except for any actions requiring Town Council approval as a matter of law. ARTICLE 3. INDEMNIFICATION 3.1. The Employer agrees to defend, indemnity and hold harmless the Town, its officers, officials and employees ("Indemnified Group") for liability for, from and against claims, damages, losses and expenses of any nature whatsoever (including but not limited to reasonable attorney fees, court costs, the costs of appellate proceedings, and all claim adjusting and handling expense), relating to, arising out of, resulting from or alleged to have resulted from the Employer's acts, errors, mistakes or omissions relating to any action or inaction of the Employer under this Agreement, including but not limited to work or services in the performance of this Agreement by any subcontractor or anyone directly or indirectly employed by or contracting with the Employer or a subcontractor or anyone for whose acts any of them may be liable. 3.2. If any claim, action or proceeding is brought against the Indemnified Group, by reason of any event that is the subject of this Agreement, the Employer (at its sole cost and expense) shall pay, resist or defend such claim or action on behalf of the Indemnified Group by the attorney of the Employer, or if covered by insurance, the Employer's insurer, all of which must be approved by the Town, which approval shall not be unreasonably withheld or delayed. The Town shall cooperate with all reasonable efforts in the handling and defense of such claim. Notwithstanding the foregoing, the Town may engage its own attorney to defend or assist in its defense, and the Employer shall pay the reasonable costs and expenses thereof. 3.3. Any settlement of claims must fully release and discharge the Indemnified Group from any liability for such claims. The release and discharge shall be in writing and shall be subject to approval by the Town, which approval shall not be unreasonably withheld or delayed. If the Employer neglects or refuses to defend any of the Indemnified Group as required by this Agreement, any recovery or judgment against the Indemnified Group for a claim covered by this Agreement shall conclusively establish the Employer's liability to the Indemnified Group in connection with such recovery or judgment. If the Town desires to settle such dispute, the Town shall be entitled to settle such dispute in good faith and the Employer shall be liable for the amount of such settlement, and all expenses in connection with such settlement. 3.4. Insurance provisions set forth in this Agreement are separate and independent from the indemnity provisions of this Agreement and shall not be construed in any way to limit the scope and magnitude of the indemnity provisions of this Agreement. The indemnity provisions of this Agreement shall not be construed in any way to limit the scope and magnitude and applicability of the insurance provisions of this Agreement. 4 3.5. The indemnity provisions of this Agreement shall survive the termination of this Agreement. ARTICLE 4. INSURANCE 4.1. Without limiting any liabilities or other obligations of the Employer hereunder, the Employer shall, prior to commencing its performances hereunder, secure and continuously carry with insurers authorized to do business in Arizona the following insurance coverages: * Commercial General Liability insurance with a limit of not less than one million dollars ($1,000,000.00) for each occurrence with a two million dollar ($2,000,000.00) Products/Completed Operations Aggregate and a $2,000,000.00 General Aggregate Limit. The policy shall include coverage for: Bodily Injury Broad Form Property Damage Personal Injury Products and Completed Operations - Blanket Contractual(including,but not limited to,the liability assumed under the indemnification provisions of this Agreement); Commercial/Business Automobile Liability insurance with a combined single limit for bodily injury and property damage of not less than $1,000,000.00 each occurrence with respect to the Employer's vehicles, whether owned, hired, or non-owned, assigned to or used in the performance of the work or services contemplated hereunder. Such insurance shall include coverage for loading and off loading hazards. The insurance policies required ies r uired herein shall be maintained in full force and effect until all work or services contemplated hereunder are satisfactorily completed and formally accepted. Failure to do so may, at the sole discretion of the Town, constitute a material breach of this Agreement. The insuranceolicies required herein shall be primary insurance, and any insurance or self-insurance p � maintained by the Town shall not contribute to it. Any failure to comply with the claim reporting provisions of the policies or any breach of any of the insurance policy warranties shall not affect policies e afforded under the, to protect the Town. The policies shall contain a waiver of transfer rights of recovery(subrogation) against the Town, its officers, officials, employees, agents, successors, and assigns, for any claims arising out of the Employer's work or services contemplated hereunder. The insurance policies may provide coverage which contains deductibles or self-insured retentions. Such deductibles and/or self-insured retentions shall not be applicable with respect to the coverage,provided to the Town under such policies. The Employer shall be solely responsible for deductibles and/or self-insured retention and the Town, at its option, may require the Employer to secure theYm a ent of such deductibles or self-insured retentions by a surety bond or an irrevocable p and unconditional letter of credit. The Town reserves the right to request and to receive, within 10 working days,s, certified copies of any or all of the herein-required insurance policies and/or endorsements. The Town shall not be obligated, however, to review same or to advise the deficiencies in such policies and endorsements, and such receipt shall not relieve Employer of any 5 • the Employer from, or be deemed a waiver of, the Town's right to insist on strict fulfillment of the Employer's obligations under this Agreement. The insurance policies required by this Agreement shall name the Town, its officers, officials, employees, agents, successors,and assigns, as Additional Insureds. Prior to commencing the work or services contemplated hereunder, the Employer shall furnish the Town with Certificates of Insurance, or formal endorsements as required by the Agreement, issued by the Employer's insurer(s), as evidence that policies providing the required coverages,conditions and limits required by this Agreement are in full force and effect. In the event any insurance policy(ies) required by this Agreement is(are) written on a "claims made" basis, coverage shall extend for two (2)years past completion and acceptance of the Employer's work or services contemplated hereunder, as evidenced by annual Certificates of Insurance. If a policy does expire during the term of this Agreement, a renewal certificate must be sent to the Town fifteen(15)days prior to the expiration date. Insurance evidenced by the Certificates of Insurance shall not expire, be canceled, or be materially changed without 15 days' prior written notice to the Town. ARTICLE 5. SUBAGREEMENTS 5.1. Subordinate Agreements. The Town and,the Employer hereby acknowledge that operation of the regional center and the national training center on the Property may be P accomplished by the Employer through a series of sales, leases, joint ventures and/or other agreements and arrangements with other experienced employers, investors and owners of real property. In connection therewith, it is anticipated and contemplated by the parties that such employers, investors or owners may desire to negotiate and enter into separate and subordinate agreements with the Town and/or the Employer with respect to financing, leases, uses, improvements, plan approvals, and other similar matters which may be the subject of separate agreements between such employers, investors and owners and the Town and/or the Employer. The parties hereby agree that any and all agreements entered into with any such employer, investor or owner of any parcels of the Property shall be subordinate in all respects to the terms and conditions of this Agreement and, in the event of any conflict or discrepancy between the provisions of any such agreement and the terms and conditions of this Agreement, this Agreement shall govern and control. ARTICLE 6. MEDIATION AND DEFAULT 6.1. Representatives. To further the cooperation of the parties in implementing this Agreement, the Town and the Employer each shall designate and appoint a representative to act as a liaison between the Town and its various departments and the Employer. The initial representative for the Town (the "Town Representative") shall be the Town Manager and the initial representative for the Employer shall be its project manager, as identified by the Employer from time to time (the "Employer Representative"). The representatives shall be available at • 6 • to discuss and review theperformance of the parties to this Agreement and all reasonable times the operation of the regional center and national training center on the Property. 6.2. Mediation. In the event that there is a dispute hereunder which the parties cannot resolve between themselves, the parties agree that there shall be a 45-day moratorium on litigation during .which time the parties agree to attempt to settle the dispute by nonbinding g mediation before commencement of litigation. The mediation shall be held under the commercial mediation rules of the American Arbitration Association. The matter in dispute shall be submitted to a mediator mutually selected by the Employer and the Town. In the event that thearties cannot agree upon the selection of a mediator within seven (7) days,then within three p � p ( ) Y3 days thereafter, the Town and the Employer shall request the presiding judge of the Superior Court in and for the Countyof Yavapai, State of Arizona, to appoint an independent mediator. The mediator selected shall have at least five (5) years' experience in mediating or arbitrating disputes relatingto business development. The cost of any such mediation shall be divided equally uall between the Town and the Employer. The results of the mediation shall be nonbinding on thep arties, and any party shall be free to initiate litigation subsequent to the moratorium. 6.3. Default. Failure or unreasonable delay by any party to perform any term or provision of this A eement for a period of ten (10) days after written notice thereof from gr another partyshall constitute a default under this Agreement. If the default is of a nature which is nocapablebeing of cured within 10 days, the cure shall be commenced within such period, and diligently pursuedcompletion.dill entl to The notice shall specify the nature of the alleged default and the manner in which the default may be satisfactorily cured. In the event of a default hereunder byparty, the non-defaulting party shall be entitled to all remedies at both law and any in equity, including, without limitation, specific performance and the right to perform the obligation(s) of which the defaulting party is in default and to immediately q y' iatel seek reimbursement from party the defaultingart of all sums expended in order to cure such default, together with interest on all such sums from the date said sums are expended by the non-defaulting party for �n thep �u ose of curing the default to the date such sums are paid in full. NTEREST•, REPRESENTATIVES NOT INDIVIDUALLY ARTICLE 7. CONFLICT OF I LIABLE 7.1. Conflict of Interest. Pursuant to Arizona law, rules and regulations, no member, official or employee fi ial of the Town shall have any personal interest, direct or indirect, in this i Agreement, nor shall any such member, official or employee participate in any decision relating tothis Agreement which affects his or her personal interest or the interest of any corporation, partnership or association in which he or she is, directly or indirectly, interested. . No member, official or employee of the Town shall be 7.2. No Personal Liabilityp personally liable to the Employer, or any successor or assignee, (a) in the event of any default or pens y breach by the Town, (b) for any amount which may become due to the Employer or its successor or assign, or(c)pursuant to any obligation of the Town under the terms of this Agreement. 7 ARTICLE 8. MISCELLANOUS PROVISIONS 8.1. Notices. All notices and communications provided for herein, or given in connection herewith, shall be validly made if in writing and delivered personally or sent by registered or certified United States Postal Service mail, return receipt requested, postage prepaid to: If to the Town: Town of Prescott Valley c/o Town Manager 7501 East Civic Circle Prescott Valley, AZ 86314 If to the Employer: Lockheed Martin Corporation c/o Assistant General Counsel LMC Properties,Inc. 100 S. Charles Street, Suite 1400 Baltimore, Maryland 21201 or to such other addresses as either party may from time to time designate in writing and deliver in a like manner. Any such change of address notice shall be given at least 10 days before the date on which the change is to become effective. Notices given by mail shall be deemed delivered seventy-two (72) hours following deposit in the United States Postal Service in the manner set forth above. 8.2. Waiver. No delay in exercising any right or remedy shall constitute a waiver thereof, and no waiver by the parties of the breach of any provision of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or of any other provision of this Agreement. 8.3. Headings. The descriptive headings of the paragraphs of this Agreement are inserted for convenience only, and shall not control or affect the meaning or construction of any of the provisions of the Agreement. • 8.4. Authority. The undersigned represent to each other that they have full power and authority to enter into this Agreement, and that all necessary actions have been taken to give full force and effect to this Agreement. The Employer represents and warrants that it is duly formed and validly existing under the laws of the State of Maryland and that it is duly qualified to do business in the State of Arizona and is in good standing under applicable state laws. The Employer and the Town warrant to each other that the individuals executing this Agreement on behalf of their respective parties are authorized and empowered to bind the party on whose behalf each individual is signing. The Employer represents to the Town that by entering into this Agreement, the Employer has bound its interest in the Property and all persons and entities having any legal or equitable interest therein to the terms of the Agreement. 8.5. Entire Agreement. This Agreement, including the following exhibits, constitutes the entire agreement between the parties. This provision applies only to the entirety of this 8 Agreement only; additional and separate agreements with the Town may apply to the Property, and this provision has no effect on them. Exhibit A Legal Description of Property Exhibit B Letter dated May 12, 2005 from Town to Employer 8.6. Amendment of the Agreement. This Agreement may be amended, in whole or in part onlywith the mutual written consent of the parties to this Agreement or by their successors in interest or assigns. The Town shall record the amendment or cancellation in the official records of the Yavapai County Recorder. 8.7. Severability. If any other provision of the Agreement is declared void or unenforceable, suchP rovision shall be severed from this Agreement, which shall otherwise remain in full force and effect. 8.8. Governing Law. The laws of the State of Arizona shall govern the interpretation and enforcement of this Agreement. The parties agree that venue for any action commenced in connection with this Agreement shall be proper only in a court of competent jurisdiction located in Yavapai County, Arizona, and the parties hereby waive any right to object to such venue. P Y 8.9. Recordation of Agreement and Subsequent Amendment; Cancellation. This Agreement, and any amendment or cancellation of it shall be recorded in the official records of � the Yavapai County Recorder no later than 10 days after the Town and the Employer execute such agyeement, amendment, or cancellation, as required by A.R.S. § 9-500.05. Fees and Costs. If either partybrings a legal action either because of a 8.10. Attorneys' breach of this Agreement or to enforce a provision of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees and court costs. 8.11. Notice of Conveyance or Assignment. The Employer shall give notice to the Town of any sale of the Property at least 10 days prior to the effective date of the sale. 8.12. No Third-PartyBeneficiaries. There are no third-party beneficiaries to this Agreement, andno person or entity not a party hereto shall have any right or cause of action gr hereunder. 8.13. No Agency Created. Nothing contained in this Agreement shall create any partnership,joint venture, or agency relationship between the parties. 8.14. Non-Liability of Town Officials and Employees. Except for mandamus and other special actions, no member, official or employee of the Town shall be personally liable to the Employer, or successor in interest, in the event of any default or breach by the Town or for any . anyamount that maybecome due to the Employer or successor, or under any obligation under the terms of this Agreement. 9 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. THE TOWN OF PRESCOTT VALLEY, a LOCKHEED MARTIN CORPORATION, a municipal corporation of Arizona corporation of the State of Maryland By: By: Harvey C. Skoog,Mayor Its: ATTEST: By: Diane Russell, Town Clerk APPROVED AS TO FORM: Ivan Legler, Town Attorney • 10 STATE OF ARIZONA ) ) ss. County of ) The foregoing instrument was acknowledged before me this day of 2005, byHarveyC. Skoog, Mayor of the Town of Prescott Valley, Arizona, a municipal g corporation of Arizona. Notary Public My Commission Expires: STATE OF ) ) ss. County of ) The foregoing instrument was acknowledged before me this day of g g 2005, by , on behalf of Lockheed Martin Corporation, a corporation of the State of Maryland. Notary Public My Commission Expires: • 11 EXHIBIT "A", Site Plan 12 -T WHO emon9/ NUld )11S 1. -1 ill g 11NOZIHY'A311YA 11OO93dd 'HO A3111/A 151/3 "j Pel'UM, irii10.:,i*P ‘02 11, BISVHd < .hf r --..." -q, :Illif )Iddd 31Vd0dd0a A311VA 1100S38d % `i g`dJ ' / / / • / g , / i f di . '' 1; / / I ! „/ / / / / : I IP I;; P / / / , II 4 gagi 5 ill . ' / 4 . 1„,, , v I s ,,, 15 b i li ,h ilio j L. ar a / , / I#,'.l'\ 1;li 110011 1 ii I'51 ri.... 1 it 1.8 1.- 1;II il Z / / v ,, , ) a! idibs!Aisali! ti! 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'•.•1 :••!:.,...: .,.. 1. 1. r iii' . • ' , • ' •1' • 1:::...;:.: ' 't i....'....', . • •' ,•,, ,',1. • , I.,• ,1...:i 11,I-i•1,• - ,, ••1 1,, ,.1.1• i ,,i 1 r, , . . '. •. . t • II . .1''( ., •...,:,.../:::...,.': ,•'. ', ,'...1......! I'1 ,1 1 rll'Ir• ,.1 • 1:: ,, I • ,,,, .t, , 1 •i • ., •, . ':.l•1. ,, ,. .;.: , ,:'•' "1.. .,.1'4 ••t' •i''.!;1 t' The Town�.•of..Prescott Valley kii ; 7,..(6.'' 1. , 1 1 , •, ' r.! .I.(' t'•.t.: • ' , • ' 1. '� c' . • Office of.the Mayor //�� '1 t•I.•.. •' •'' •1', '1••'••'1,, ,1 •:li•'1:.•:?-,..,:.,,. 't.••!!t 1" , ii ••1.1i ,1.1'1 11•i.* 1 ' '•'• •1' '' .,t i.1 • ., . . VALLEY � . '•1' :.-:. :. ,•:t' .•.;,•,),','• ,., ;. . . . 1 ,' '. ,.. (• :�!'• .,..!...1 . '' 7',S�i'•"E:•Civfr.Circle PRESCOTT . '• '. •'.:••. - .• ;., 1, • .r , . •-, • ' ,/: ,•• .' •-; • •, ';1'• i . •.1•i!r t....... ...+'.1 !1i.1', '.t. :'t ••' .1, i 1 '• • • ,I 'I'•' ( . I.1'rescott•'Y of y - • 1 1 ; , • •: ; , . ; ' , ' Anzona 86314 ' i• i ,. ' : .. , 1, I r,' ,. ;1.: 1, • May 12,2005 1 .-' ,�. , ► , :,': '' •1; ' ^[l�M•.► ' ! •, • ;',.!' . ' •' '• • ' + • 1' • ( 1, ;1• ' .• :-..-:•,•,1 • 1 .J t ' ..('• . ,E C/.�I1 Y U 1 • • Mr•Charles'F••Wilkinson •'-• : ' 1.....:*• ' .. , '• . • ! . . Je• •r•a�i1Cou•n•se�• •.. . -:;•:'1 •• ••••.'1 1• , I1. ••.. ,. •' • • 1.1 1 1, •,LEGAL t DEPT Assistant tie ,• • • • 1 , ' . • . , • • •• LMC•Pibpertxes • � , /( � .,• :••► • ' '' ,. • ' � . •1.00 S..Charles'Street,.. • •• •. :• •1 E ' I ! • Baltimore,•M ylan .2•1201'... . ' ;•. • ;- • ; • Dear Mr•W ilkinson•7 ' . .. .. • . ` 1• •• ' ;i••I . , • ••- • The:• 1 se'1of'this'letter•'is:to:affirm the;.econom.ic'development incentives!'di•scussed with . , ' , Je4 Troan;'''and William 'La mb,'on1..:Tuesday,'May•110;,•in Prescotti Valley••We are.very . kneed. •.i 1• 1•'ting!tie;re'' .,• national • ' p1ea..ied to;haivi hoc n.1oca gional center and.your g center t,''un ur cott munity. ,� • , • t• ,',. •. •„ ,t ,(• •,, '(• I • 61 I' •', r:/ values.ithie. 1 `'ershi of'•• ;.'1' kheed•M� ' •Aand:Prescott�Valley�'and:vire;are • con 1deiit'that�each of..tour-anew:'employees;:will.,'equally('enjoy.?les, cott valley as.a.:greatiplace. . : • •••. : .. • • .{ • ' 1 ,,:,• .' •, • •.,• • • 1 t,l , t ,1, 1. j r 1•'' ' • f ,• 1' . i, •' 1to live,work..an•dcall:l o '.' 4. ./;;.,!.i,...,....•••1•:' ,'./1 , ; 1 • / •• • • ' • .'«' :'• •;•1 , :„'t. ..; f' kneed Martin:as • ' • • E.• As.w•e::discussed;.•our:;local'! :quality:,lobs •ro ,'.r,bei ig:offered! to Loc •a ! quality obs;. ov• ider is a J.O.b perfor•mance-based program,' •• ; 1 , 'i , 1i• ' g il♦'qi a.. feFS•( ' '..,••,:••••• ' • /' 1 • 1 ! , . .. '1.( • • Proa (' :,' ,. •i •' • lr • r, • 1• •,,, ` 11•,., .,f i .. ,._ ' •1 • • • ,'' , 1. 1 ':•:,,...•"-.•:,.:-.L. ,1. i 1 ., -•,•,'. .1. •• •, 1 • (1 i'(•'••' • 1' -.:-11•1•1 1i,•:••••..:...'....•} •..''•.'',:.. ,. •' • • ''1.. Full°=ime.employee' : •, ';. :•:.•y•‘: 1 •'. :i.:•t •. /•: ,''•'•••, ••• :•• • • • - ' ' ,,: �, ., . t •�. •'� �!•' • ' em li 'ee., . ,;•• ,,:,▪ :+;,., .r'� . . . : •,: • ' • • • ' ,2.' , Employer provide:'healih•:insuran•ce`fol P o • • ,!.� . . .: , • / . . _ . • • ii• . ' 3 • 'Ern' o• ee.base ay.*must-exceed•county:average:by 20%,....••; •' ' ' -'•i - ..-•,';-I• i ••.•..--....1.-...!..-.,.,..c• ' ''1 .•i.. ( , 1'• '. !i' 1.1 ••i.• i'H 1 r 1•• ,.• r ,,;'• 1 ( . 1 ' ' 1 : . • r 4. `Em lo: ee!employment.�l'ocation;within-PrescottValley ;:: ,','• '1•• • ''.1 : . .,'1 l ' • "' ' ,' '.....1. "'.!•. 1.1 1 1.•. (�..:'.::,-.,1111. ,•,•!::-;••.._:•!.:.:'.:,•!: ',•,ji 1'1 t..•• ,' •. ' :. _I • t 1. I .benefits.• :''L • � • '• 1' , , • • •' 1 .' ► ' ( • '1•11 • •1 ' . ' , • Program :' .' . /• , , ' ,.• •,1.'•( ,,' ; '11 j.%(' , 1 •,..•.. ,{' •I , •! i.., , .. • . 'l +, •, '•f• ,•..r {•.I''t,.{•Casi 1.• - .... t .'t ./ ' '.1",.'••,,•'..1!' ,• (1",i ('.1( ' y'1''"•i! '! {'=1,. ' , 1 1 ' •l Fve,V�learbenefit,$300:00/qualifiedslobiyr:,;;Cap'of+$:1 500:00lqualified,fte.• • • . ... • • • .i'.:..1, 'Expedited.opermitting..:onl•all bu,�lding�'&•isItes;lpetmtsirequired by,the..Town'of ''•. ' - ' • .• • PrescottValley:ti •(-+•,.•• - ..1•''.. '''•1 t'/ 't ll'.f•• 1. .i/l.•�•;1•,i.••I/• ,'�1', I,1....:1;.....,.•,,, .1 •1.. ,. I• • ' '•1 ' •., ' ' •• • 1 .,... •..,,, .: •,... ,,....:;:,... .....• .,.. . !, .„..,..,..,„. .. .;..,....:,,.,..,, ,. .. ,„ ,, . - . . .. , . , . . dislCti'si'iii'fis.;*,1,,.0i'l� •anticipated. .,. `'• .' (•': `� ' ' • urPrescot',,,,Val.ley'centeof 04, .'•.A :per our e• '.qual"ify�rig+.�obs'at yo. . • . • .. . • . the cash value.wovad:be•2.0'0;x.-$300:00:=•$.'60;•0•00.00'xi•5yrs;• •$300,000 00.,"T1 e•.cash . , • . . ' ' . 1, . •• . .benefits::are paid end=of-year:. ; • �(•'.- • :i 1• 't, ' i: . ;• ' : ,. - : • - 1 ,•, • 't`....,::•,•:..-...,-.-,:,-,..,.....• • '• •1•• j ,11,••:!:"•.• • ,,•,i, i.1",,i•• ,••. .' {11 1,.1 •I 1 , •1 . ' • r • • • • •' t I ..:• j .1' • , 1 .••,r ',,..,:; . ••., .••''•'i..• •:+••' ,;•••I r•Y•..•• ,'!i! ..• • '•I , ••• .i • '' - Tele hone 520 759-3 i'00 :�.E-m aii:thur ::c:p � rescotv talley;;=a :.us•'•-iF•axc••7:59 31'25 TDD 7,• 7.2-'2700 • ' r f . • -r I • • •.r• •., ,i , _,••...•• .•••, •1 rr•' '• ''''•',„',- 1,., •.1.1•' •. , ". 1, .i,.., 1 11 ,:i•� a •'.t: . .'• "�•., r .1,''1,, ',•• I' • •1 I, i•: • i'.i.,l., i •'' '''•''•• •••i{1• •1 4 11111:l'',1,4'}1�'/' r.,,,!• ' r.! !1,•f'1; . , ., i ,, .' • . , • •► !, .1 • 'r •, I l I,,1 �1 ''•+",• 1,' rl,r.'• fir, '' ,"{•.. 1 .,•• 1. , �.' .. ;I' I. '• ' 1 I , .1 r• . .1 t • , ;�'.r ►I 11.,,{ • .' •I. ,/. L )I !' , ' 1 • - 1 , 1.' '••,..: '1 .. .{ !11• ��• ,1 I•, 1' ,1.•1 .;}Ir ,ti+'• ., i,• 1 , l e...,F IW. . • ' •, :. j. ..1 . 4.; ''I. 1,;•} :IIj • • .. ti_. •,Mr: har s' Wilkinson • • ' • • • : ' •• .•I•• , -. • •'. • . .;ti i�' ...: • Assistant General�:Counsei '• '' ' :; • •' .•►}, .: _ - • I :.•LMC)Properties,•Inc:. • ' • 111 , ..� ' .i' { '•( , • •., , ; 1, '.. . • 1 , , 2005 , .• !, •,. •, ,, r . , 1•, ! .,., ; ,• . ; • .I . i • •1 ', •''. • May..:I.2 ••, • • • • 1 '' ' a ( • 1• .• •• r' 4 •1•' • • ' ,...i.. , • • (• 'f'• • ' ,•• I'•r •,''!,'',•' :• • • age 2 • • • ' •'1 ri ., .• ... ( t.', ' • Il1••,, ,, �.' • '..,' .1.. , • it • '/'■■�,���■rA•;./{1��.♦�■1_y%•�r�,Pa 1 ,t ' i • '' i' ''I!,`r,{ •—•:.• ,• I. I ' I, •.'1 1) • ' 1 . ,, , 1 ' • ' �•��•M?V M,��rI • •V• a•• •I•• • 1•,' � •I, .•1, f i1, •..e,' �'...r•i �, • •' .� I r' !: ••• I 1.•n. •' ••,r ,, '} .• ' • , ' ,, .• • uicent� es.' 1 1 r•► • ' ►• I 1, r .1 •' • • •••I 1.-1 ' : •State:Jobs Training:grantt rograin ,:' ' , , 1. ,•, • • • - •' 2. Enterprise Zone•;tax icredit' ''ro • •• , ; -. j ; These'issues w addre 1 • .: 1 ,• •� •. ..'••.. , • „ ,. •,, ..;: •:• 1 1 1' • •. .'. • ...dssed.by•Anzona,Depar'tment of'Commerce,officials: '' ' • • . • •., •.• •'• ' Working;wityouipublic relations,de.department,timetable.for'an..announc • eritww ill-trigger our , •, schedulin• of this•Develo ment A reement•forl'tie'full•,Town•Counci•ratification. , g� -• ',;;• P,,: . . 1'87 ,,,,•, , ,,,,,, ,,, ,;,,,,, , ; , ,,,, , : • • • • ' Agai ,we en�oyed.mee•ting'with each�of you'and are'lookirig..forward to,:wo. with• your. • ' staff in developing an.MO.0.Or developm•ent• .., 'cemen•t over•the;next;few• •weeks':•Please feel • t i 1' • •1 fJ •'• • •, , • • -free to contact. •Marks';at,928-77.5-0032'o i arty'Tarkowski;.o•ur Town Manager at•928- 759-3101 with•anyqu •,•,' .• ; •a' .'r'1 , : .Retfut ly ; ••.' .,1 •• i,. • .1; ,'•; ,• j'..;'•. •,.! 1 !i,' {''•.'' . •' • ; . ' • , •r i r I 1 ' • , 1 • • •, .♦i Al ,'• ' I • ..,;,., .,f....:.......,.........J.1.1 •,... .,t, ;,..14,..,,...,..,..„,.. .......:;s:2.:....' 1 . 4•' •'i'! : •'.•• t' :„... . .. . • . ; , ,. , , r '' i ,''i , :L.,. '•1;1 , (' _•r , :,::i;i::,., • r• 1 .' •' 1. I'• i 1 I Harvey C. Sk ` g" •. .. ' ; a • r r• ,: .,• r,•i� ,�� ;'� .�� •'� ►Jli!�! ��) •1Viicl�el,��'1�annery ' , Mayor , _: ••; ..+'.•. •", ; •1 • {, '• Nil•• `' •' 1 1 ' • .1 i 1' i .1•' • ' ' ' '• •,•T1Ce`,Mayor ,, j' ; , . • ' ,1• , ' • �'• .,, .. '• ; ,•1' r:r' '. . , ', •1 1. ,1 •,. '• 1 ( . • • •' 1•• • I I l ) I 1• ♦ 1•,. • j� •t 1'' 1.1,• ,'l ', ' 1 1' •• ,'1 ,•: '1•,•, • I r • • • • • '•; • � !•1 1.•••'..,.,: ••,;:. •�)••,,r• •.:1.• •••• ..r. 1 ,,1', .,, I.• .•' :f'•;•1 ',1. .• ,i ', i•I 1,1,• .. . �, (' ' t ; • • • • ' ,' • • 1 I I • I} • 1.. • • • • , • 1.• , • .• : {.1 '.1 f ",, r•• 1 .1• , • •, 1, • • . a . ,11 .i i , • •,.• , ! 1• 1, 1 1, • ,, , ...,.• •L' l i , :• • • • .1 1• • • , • ,, I. 11 I' , •1 1 ('•,1, ,i-• 1 • • 1 ' 1 • 1 i +i 1 r 1 l 1'al • . • ,., ,'J , ! 1•r , . , 1. ! ill l • 1 , . ' 1 •'1 , 1. I :) , .. 1 Attachment "B" MARANA SPECTRUM DEVELOPMENT AGREEMENT TOWN OFA,ARIZONA This Development Agreement (this "Agreement").is entered into by and between the TOWN OF MARANA, an Arizona municipal corporation (the "Town") and Kimco BARCLAY MARANA, L.P., a Delaware limited partnership (the "Owner/Developer"). The Town and the Owner/Developer are collectively referred to in this Agreement as the "Parties," and each is sometimes individually referred to as a"Party." RECITALS A. Owner/Developer was formed and exists for the purposes of owning and developing approximately 170 acres of real property located within the corporate limits of the Town (the "Property"). B. Owner/Developer intends and desires to develop a regional lifestyle/entertainmentlpower retail shopping center on the Property containing approximately 1,200,000 square feet (the "Development"). C. The Property and the proposed Development were included in and subject to the provisions of the Marana Spectrum Specific Plan (the "Marana Spectrum Plan"), approved by the Town on August 7, 2007 pursuant to Ordinance No. 2007.19. D. The Property is legally described in Exhibit A attached to this Agreement. E. The Town and Owner/Developer desire to establish certain agreements regarding the Development pursuant to A.R.S. § 9-500.05 and certain agreements in connection with development activities for the economic benefit of the Town pursuant to A.R.S. § 9-500.11 upon and in accordance with the terms and conditions set forth in this Agreement. F. The Development is consistent with the Town's long-term economic development strategies and is expected to create a source of significant tax revenue for the Town for many years. G. The Development will have a substantial positive economic impact on the Town because it is expected to provide diverse commercial and retail service opportunities consistent with the businesses targeted by the Town. The facilities to be constructed as part of the Development are expected toproduce a significant number of new jobs andgenerate substantial sales tax p � �.. revenues. Consequently, the short-term and long-term benefits of the Development will offset 1 and significantly outweighthe costs of the reimbursementsprovided bythe Town under this � y Agreement. H. The Development will provide significant intangible benefits to the Town as a retail lifestyle/entertainment/power center and may also include mixed use, hotel, office and residential components. 100006071.DOC/41 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT -1 - p I. The Development is in compliance with the Town's adopted and approved General Plan (as defined in A.R.S. § 9-461). J. The Town is authorized by A.R.S. § 9-500.05 to enter into a development agreement with a landowner or other person or entityhavingan interest in real property located within the Town of the property byproviding for, among other things, the conditions, to facilitate developmentp p Y q terms, restrictions, and requirements for development and public infrastructure and the financing Because of its location and typography, the Development will entail of public Infrastructure. significant atypical additional offsite and site costs requiring reimbursement for feasible development. A eement the Town Council has found and determined that certain K. In approving this gr � , , • • ' Development are economic development activities within the meaning of activities relating to the De p A.R.S. § 9-500.11, that all expenditures bythe Town pursuant to this Agreement constitute the p public p and expenditure of monies for and in connection with economic ' ' ' and that it is appropriate to provide Owner/Developer with the development activities reimbursement in this Agreement as an inducement to cause Owner/Developer to construct, own and operate the Development in the Town. L. The Town adopted a notice of intent to enter into this Agreement not less than 14 days before the Townpp Council approved this Agreement, in compliance with A.R.S. § 9-500.11. M. The Town Council finds that the Development will raise more revenue for the Town than the amount of the reimbursements to the Owner/Developer within the duration of this Agreement. independent third partynot financed by the Owner/Developer has verified the Town N. An of Council'sfindingthat the Development will raise more revenue for the Town than the amount p the reimbursements to the Owner/Developer within the duration of this Agreement. Q. The Town Council finds that in the absence of the reimbursements to the Owner/Developer providedpursuantAgreement,to this A eement, the Development would not locate in the Town in the same time, place or manner as it will with the reimbursements to the Owner/Developer. P. The Owner/Developer er will incur out-of-pocket public infrastructure construction costs and contributions for public infrastructure and environmental mitigation in the will make certain immediate vicinity of and directly benefiting the Development. Q. The reimbursements to the Owner/Developer provided pursuant to this Agreement are intended to reimburse the Owner/Developer for its out-of-pocket public infrastructure construction costs and public infrastructure and environmental mitigation contributions and 1 and carrying costs, as described more specifically in this Agreement. related interest atryi g2 AGREEMENT THEREFORE, in consideration of the mutual promises made in this Agreement, the Now, Parties agree as follows: 3 Article 1. Background 4 1.1. Incorporation I co oration of the Recitals. The foregoing Recitals are incorporated here by this reference. {00006071.DOC/4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT - 2- 1.2. Proposed Uses. The Development is a retail center planned to accommodate a range of differing but complementary retail-related land uses on an integrated and master-planned basis. Typical uses envisioned in the center include destination and major anchor retailers not otherwise found or clustered in the Town, lifestyle and other retail shops, restaurants, entertainment facilities, national electronic and other hard goods retailing, financial institutions and other service businesses, landscaping, and distinctive common areas. The Development may also include mixed use, hotel, office and residential components. Overall, the Development, which will have a unique regional draw, will create substantial additional sales tax revenues for the Town, will assist in the creation or retention of jobs and will otherwise improve or enhance the economic welfare of the residents of the Town by bringing customers to the Development from the Town and surrounding communities. Exhibit B attached to this Agreement is a conceptual description of the master site plan for the Development. This master site plan will be updated in accordance with paragraph 2.3.2 below. 1.3. Definitions. The following definitions shall apply to this Agreement: 1.3.1. "Anchor Tenant" means a retailer occupying more than 80,000 square feet of building area. 1.3.2. "Anchor Tenant Parcel" means any parcel in the Development owned, leased or operated by an Anchor Tenant. 1.3.3. "Construction Sales Tax Revenues"mean those portions of the Town's transaction privilege taxes (currently 4%) generated pursuant to Section 8-415 or 8-416 of the Marana Tax Code from construction contracting or speculative builder activities occurring on the Property. 1.3.4. "Developer Parcel" means any portion of the Property other than the Anchor Tenant Parcels. 1.3.5. The"Development" is defined in recital B above and described in Exhibit B and in paragraph 1.2 above. 1.3.6. "Development Regulations"is defined in paragraph 2.1 below. 1.3.7. "Initial Development Plan"is defined in paragraph 2.3.1 below. 1.3.8. "Initial Minimum Improvements" is defined in paragraph 2.3.1 below. 1.3.9. "Interchange" means the currently planned freeway bridge and related ramps commonly referred to as the "Twin Peaks TI," consisting of the approaches and interchange system at approximately milepost 245 of Interstate 10, connecting Interstate 10 to Camino de Manana adjacent to the Property. r� 3 1.3.10. "Interest" or "Interest Rate" means interest on the applicable obligation or sum (including the Total Reimbursement Amount) at the rate of 6.5% per annum, compounded quarterly on the first dayof each calendar quarter. q y Mar 1.3.11. The"Marana Plan"3 ana Sp trum lan is the Marana Spectrum Specific Plan, approved by (.) the Town on August 7, 2007 pursuant to Ordinance No. 2007.19(see recital C above). 3 1.3.12. The "Property" is defined in recital A above and described in Exhibit A attached to this Agreement. {00006071.DOC/4) 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT - 3 - 1.3.13. "Public Improvements" means the improvements described on Exhibit C attached to this Agreement(see paragraph 3.1 below). 1.3.14. "Public Improvement Costs" means all costs, expenses, fees and charges actually incurred andaid byor on behalf of Owner/Developer to contractors, architects, engineers, p surveyors, governmental agencies, other professionals and consultants, and other third parties g materials, labor, planning, design, engineering, surveying, site excavation and for p g preparation, governmental permits and payments, payment and performance bonds, other professional services, and all other costs and expenses related or incidental to and reasonably necessary �for, the acquisition, improvement, construction, installation, or provision of the Public Improvements, together with all costs associated with the acquisition of lands, rights- of-way and easements either to be dedicated to the Town or upon which Public Improvements are to be constructed,with Interest as provided in this Agreement. 1.3.15. "Reimbursement Account" means a separate account within the Town's General an Fund or accounted for byappropriate book or ledger entry designation for the purpose of pp making Reimbursement Payments(see paragraph 6.2 below) 1.3.16. "Reimbursement Payments" is defined in paragraph 6.4 below. 1.3.17. "Sales Tax Revenues" means that portion of the Town's transaction privilege taxes (currently 2%) generated from the following activities occurring on the Property: 1.3.17.1. Amusements, exhibitions and similar activities pursuant to Section 8-410 of the Marana Tax Code. 1.3.17.2. Hotels pursuant to Section 8-444 of the Marana Tax Code. 1.3.17.3. Rentals pursuant to Section 8-445 of the Marana Tax Code. 1.3.17.4. Restaurants and bars pursuant to Section 8-455 of the Marana Tax Code. 1.3.17.5. Retail sales pursuant to Section 8-460 of the Marana Tax Code. References to sections of the existing Marana Tax Code shall include corresponding sections of successor codes. 1.3.18. The"Total Reimbursement Amount" is defined in paragraph 6.1.1 below. Article 2. Development of the Property. 2.1. Development Regulations. The development of the Property shall be governed by the underlying zoning or land use designation and the standards provided for in the Marana Yi g Spectrum Plan, including the Owner/Developer's design and development standards and guidelines, as clarified and supplemented by this Agreement. The Marana Development Code, substantiveprocedures, and policies relating to y including the written rules, regulations, development of land, adopted or approved by the Mayor and Council (collectively the "Marana p p I. Development Code") in effect on the effective date of the Marana Spectrum Plan shall apply to the extent not covered bythe Marana Spectrum Plan or this Agreement. In the event of any express conflict, the terms of this Agreement and the Marana Spectrum Plan shall control over the Marana Development Code. For purposes of this Agreement, the underlying zoning or land use designation shall mean full development, exclusive of voluntary limitations or restrictions, under the controlling underlying zoning or land use designation included in the Marana Spectrum Plan, and if not so covered, under the Marana Development Code. All signage and {00006071.DOC/41 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT -4 - lighting standards shall be governed exclusively by the Marana Spectrum Plan for a period of five years from the Effective Date of this Agreement. Anything else in this Agreement to the contrary notwithstanding, the Town shall not apply any ordinances enacted after the Effective Date of this Agreement which impose special limitations or restrictions on the development of single user retail facilities in excess of a certain size limitation (such as 100,000 square feet or more of retail space) for retail facilities on the Property. The immediately preceding sentence shall terminate on the tenth anniversary of the Effective Date of this Agreement. The requirements of this paragraph are collectively referred to as the"Development Regulations." 2.2. Development Review. The Property shall be developed in a manner consistent with the Development Regulations and this Agreement, which together establish the basic land uses, and the densities, intensities and development regulations that apply to the land uses authorized for the Property. Upon the Owner/Developer's compliance with the applicable development review and approval procedures and substantive requirements of the Development Regulations, the Town agrees to issue such permits or approvals for the Development as may be requested by the Owner/Developer. 2.3. Initial Development Plan. As a condition precedent to the Owner/Developer's right to receive and the Town's obligation to make Reimbursement Payments under Article 6 of this Agreement, and not as a separate obligation, within 36 months of the date the Interchange is completed by the Arizona Department of Transportation and first open for vehicular traffic and use by the general public, the Owner/Developer shall prepare and submit to the Town the following: 2.3.1. A development plan (the "Initial Development Plan") for the initial construction of the Development, consisting of at least 120,000 square feet of retail building space and related parking, supporting infrastructure and amenities (the "Initial Minimum Improvements"). 2.3.2. An updated revised conceptual master site plan for the entire Development. 2.4. Minimum Construction Obligation. As a condition precedent to the Owner/Developer's right to receive and the Town's obligation to make Reimbursement Payments under Article 6 of this Agreement, and not as a separate contractual obligation, the Owner/Developer shall obtain building permits for and begin construction of the Initial Minimum Improvements in a manner consistent with the Initial Development Plan within twelve months after the later of (i) the Town's approval of the Initial Development Plan or (ii)the Interchange is completed by the Arizona Department of Transportation and first open for vehicular traffic and use by the general public. 2.5. Cooperation. The Parties shall cooperate and share information and plans for the 1 construction of the Interchange and the construction of the Development, to assure coordination between the Interchange construction and the development of the Development. This 'I coordination and information sharing shall include, without limitation, the Interchange height, scope,ramps and curb cuts. 2.6. Abandonment Proceedings. The Town agrees to timely begin and diligently pursue abandonment proceedings pursuant to A.R.S. § 28-7201 et seq. to abandon the existing Linda Vista Road right-of-way to the extent it is located within the Development to the new alignment shown on the development plans for the Development. Owner/Developer acknowledges the 100006071.DOC/4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT -5 - ' ed bylaw, including the need to address any rights of Town's obligation to proceed as required abandoned, and companies that relyon the right-of-way sought to be ab , property owners and utility p while cooperate in good faith to address those rights justly and appropriately the Parties will working toward the goal of full abandonment through the Property. ' Abilityto DevelopAnchor Tenant Parcel. Any Anchor Tenant may 2.7. Anchor Tenant's Parcel and Tenant Parcel independently of the development of the Developer develop its Anchor p any other Anchorrequirements Tenant Parcel. So long as it complies with applicable Town eq any receive a buildingpermit and certificate of occupancy for the Anchor Tenant shall be entitled to constructed on its Anchor Tenant Parcel, whether or not Owner/Developer improvements to be er Parcel in accordance with this Agreement; provided, shall have developed the Develop Tenant'ssl Anchor right to a certificate of occupancy shall be expressly however, that an . • • Anchor Tenant's submission to and approval by the Town of a conditioned upon such Anc o the with the Develo ment Regulations and completion of: (i) development plan consistentp merits to the building to be located on the Anchor Tenant Parcel; (ii) all other necessary improve Parcel; (iii) all drives, utilities and entrances serving the improvements on Anchor Tenant Anchor Tenant Parcel; (iv) pp1• applicable amounts of perimeter sidewalks for the Development that Tenant Parcel; applicable amounts of appurtenant landscaping for entrances serve the Anchor (v) Parcel but serving Anchor Tenant Parcel; and (vi)offsite and drives located on the Developer improvements servingthe Anchor Tenant Parcel set forth on the approved development plan for Parcel and provided further that the Town's standard bonding obligations the Anchor Tenant shall be enforced with respect to Anchor Tenant's completion of(i) through (vi) above. Further p in the event Owner/Developer is not performing under this Agreement with reference to any referenced in subparts (ii)through (vi) above, Anchor Tenant shall obligations or improvementsp p have the right to cure such non-performance for a period of six months from the date of the Town's written non-performance notice to Owner/Developer in accordance with paragraph 7.2 below. Article 3. Owner/Developer's Contributions for Public Improvements 3.1. Public Improvements Construction and Reimbursement. As a condition precedent to in Reimbursement Payments under Article 6 of this Agreement, and not as a separate receiving ym the Owner/Developer shall, in conjunction with its construction of the contractual obligation, p Development and in accordance with the State of Arizona and the Town public infrastructure construction procurement laws and procedures: 3.1.1. Designand construct the Public Improvements described in Exhibit C attached to this Agreement which are identified as being constructed by the Owner/Developer; and Reimburse the Town, within sixty days of completion and written demand by the 3.1.2. Town, all costs of the Public Improvements described in Exhibit C attached to this 3 Agreement which are identified as being constructed by the Town; and 3.1.3. Pay all Public Improvement Costs as they become due. 3.2. Town Review and Approval of Plans. Except as expressly provided in this Agreement, Improvements is subject the development and construction of the Public to the Town's normal p w and approval procedures and construction inspection requirements. plan submittal, revie pp 3.3. Town Construction. The Town shall timely construct all Public Improvements identified as being constructed by the Town as set forth in Exhibit C to this Agreement. ( 00006071.DOC/4) 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT -6- Article 4. Owner/Developer's Environmental Mitigation Contribution As a condition precedent to receiving Reimbursement Payments under Article 6 of this Agreement, and not as a separate contractual obligation, the Owner/Developer shall make a cash contribution of $456,000 to the Town to be used for acquisition of environmentally sensitive lands for the preservation of species native to the general area of the Development. Article 5. Owner/Developer's Payment of Development Impact Fees 5.1. Water Impact Fees. The only Town development impact fees adopted by the Town pursuant to A.R.S. § 9-463.05 and currently applicable to the Development are the Gravity Storage and Renewable Water Resource Fee and the Water System Infrastructure Impact Fee, adopted by Marana Ordinance No. 2005.25. 5.2. Other Impact Fees. Except as specifically provided in the first sentence of paragraph 5.1 above, no surcharge, development fees or impact fees, exactions or impositions of any kind whatsoever for water, sewer, utilities, streets or other transportation systems, parks, preserves, storm sewers, flood control, public safety or other public services or any other infrastructure cost or expense shall be chargeable to the Owner/Developer or to any owner, lessee or occupant of the Development until the ninth anniversary of the Effective Date of this Agreement. Article 6. Town Reimbursement to Owner/Developer 6.1. Reimbursement Amount. The Town shall make Reimbursement Payments to the Owner/Developer for: 6.1.1. The Owner/Developer's Public Improvement Costs and reimbursements to the Town for the Public Improvements (see Article 3 and paragraph 1.3.14 above) (collectively, the"Total Reimbursement Amount"). 6.1.2. From and after the commencement of construction of the Public Improvements, Interest shall accrue on any unreimbursed portion of the Total Reimbursement Amount at the Interest Rate. This accrued interest on the Total Reimbursement Amount shall be a portion of the Reimbursement Payments in paragraph 6.4 below. The Owner/Developer shall submit to the Town a quarterly statement showing the actual construction costs incurred and contributions paid to date for the Public Improvements. The Owner/Developer shall provide the Town with invoices or other backup information reasonably requested by the Town to confirm the accuracy of the Owner/Developer's quarterly statement of costs and contributions. 6.2. Reimbursement Account. The Town shall deposit into the Reimbursement Account 45% of the Sales Tax Revenues (see paragraph 1.3.17 above) as they are received from the Arizona Department of Revenue, beginning with the first such revenues generated from the Property and ending upon the earlier of the following: 6.2.1. The expiration of this A eement. ` p �' 6.2.2. When the Town has fully reimbursed the Owner/Developer for the costs of the tg Public Improvements and Interest, even if total reimbursement is less than Thirty Million Dollars ($30,000,000). 1 5w 6.2.3. When the total cumulative amount deposited in the Reimbursement Account equals Thirty Million Dollars ($30,000,000). {00006071.DOC/4) 12/18/20078:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT - 7- Funds in the Reimbursement Account shall be reimbursed to the Owner/Developer pursuant to paragraph 6.4 below. 6.3. No Reimbursement Out of Construction Sales Tax Revenues. No portion of any reimbursement under this Article shall consist of Construction Sales Tax Revenues (see paragraph 1.3.3 above). 6.4. Reimbursement Payments. The Town shall pay to the Owner/Developer within the first Ym 45 days of each calendar quarter all funds in the Reimbursement Account ("Reimbursement Payments"), beginning the first calendar quarter after the later of (i)Town's issuance of the ym )� � g certificate of occupancy for the last building constructed as the Initial Minimum Improvements as shown on the Initial Development Plan (see paragraph 2.3.1 above) or (ii)the Owner/Developer's satisfaction of all conditions precedent to receiving Reimbursement Payments as set forth in this Agreement. Any funds accrued in the Reimbursement Account but noty et disbursed to the Owner/Developer upon the expiration of this Agreement shall be paid to Owner/Developer within thirty days after the expiration of this Agreement. 6.5. Owner/Developer Audit. Not more than once each calendar year, the Owner/Developer may, at its own cost, audit Town sales tax returns and other appropriate financial records of the Town to assureP rompt and accurate deposit into the Reimbursement Account of all revenues as required pursuant to this Agreement. 6.6. Annual Report. Within 45 days following the end of each Town fiscal year, the Town shall deliver to the Owner/Developer a report of all Sales Tax Revenues generated by or attributable to the Development which have been utilized by the Town in determining the amount deposited into the Reimbursement Account. 6.7. Limitations. During the Term of this Agreement, the Town shall not enter into any agreement or transaction which impairs the rights of Owner/Developer under this Agreement, including, without limitation, the right to receive the Reimbursement Payments and the proceeds of the Reimbursement Account in accordance with the procedures establishedAgreement. in this A eement. 6.8. Multiple Business Locations; Release of Tax Information. Since some businesses with multiple locations in the Town report their transaction privilege taxes on the basis of revenues for all their locations in the Town, rather than separately for each location, Owner/Developer shall request each such business to separately report transaction privilege taxes for transactions at its business located in the Development. The Owner/Developer shall exercise reasonable efforts to obtain from all businesses in the Development a consent to release of tax information in a form reasonably acceptable to the Town. If the separate report required by this paragraph is not provided to the Town, the Town shall make a reasonable estimate of the Sales Tax Revenues derived from the Development based on all information available to the Town, including 1 bythe Owner/Developer, and the good faith certification by the Town's information provided p � Finance Director shall be considered final and binding upon the Owner/Developer. The final 1, ' Finance Director shall be subject ect to all applicable of the Town's � PPlicabl a laws that may prohibit or limit the dissemination or use of transaction privilege tax and related information. Article 7. Cooperation and Alternative Dispute Resolution. P 7.1. Appointment of Representatives. To further the commitment of the Parties to cooperate in theP �'ro ess of the Development, the Town and the Owner/Developer each shall designate and appoint representative to act as a liaison between the Town and its various departments and the PP a (00006071.DOC/4) 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT _g _ Owner/Developer. The initial representative for the Town (the "Town Representative") shall be the Planning Director, and the initial representative for the Owner/Developer shall be Trey Eakin or a replacement to be selected by the Owner/Developer. The representatives shall be available at all reasonable times to discuss and review the performance of the Parties to this Agreement and the development of the Property. 7.2. Non-Performance; Remedies. If either Party does not perform under this Agreement (the "Non-Performing Party") with respect to any of that Party's obligations under this Agreement, the other Party (the "Demanding Party") shall be entitled to give written notice in the manner prescribed in paragraph 8.29 below to the Non-Performing Party, which notice shall state the nature of the non-performance claimed and make demand that such non-performance be corrected. The Non-Performing Party shall then have (i) twenty days from the date of the notice within which to correct the non-performance if it can reasonably be corrected by the payment of money, or (ii) thirty days from the date of the notice to cure the non-performance if action other than the payment of money is reasonably required, or if the non-monetary non-performance cannot reasonably be cured within thirty days, then such longer period as may be reasonably required, provided and so long as the cure is promptly commenced within thirty days and thereafter diligently prosecuted to completion. If any non-performance is not cured within the applicable time period set forth in this paragraph, then the Demanding Party shall be entitled to begin the mediation and arbitration proceedings set forth in this Article. The Parties agree that due to the size, nature and scope of the Development, and due to the fact that it may not be practical or possible to restore the Property to its condition prior to Owner/Developer's development and improvement work, once implementation of this Agreement has begun, money damages and remedies at law will likely be inadequate and that specific performance will likely be appropriate for the non-performance of a covenant contained in this Agreement. This paragraph shall not limit any contract or other rights, remedies, or causes of action that either Party may have at law or in equity. 7.3. Mediation. If there is a dispute under this Agreement which the Parties cannot resolve between themselves, the Parties agree that there shall be a forty-five day moratorium on arbitration during which time the Parties agree to attempt to settle the dispute by nonbinding mediation before commencement of arbitration. The mediation shall be held under the commercial mediation rules of the American Arbitration Association. The matter in dispute shall be submitted to a mediator mutually selected by Owner/Developer and the Town. If the Parties cannot agree upon the selection of a mediator within seven days, then within three days thereafter the Town and the Owner/Developer shall request the presiding judge of the Superior Court in and for the County of Pima, State of Arizona, to appoint an independent mediator. The mediator selected shall have at least five years' experience in mediating or arbitrating disputes relating to real estate development. The cost of any such mediation shall be divided equally between the Town and the Owner/Developer. The results of the mediation shall be nonbinding on the Parties, and any Party shall be free to initiate arbitration after the moratorium. 7.4. Arbitration. After mediation, as provided for in this Article, any dispute, controversy, claim or cause of action arising out of or relating to this Agreement shall be settled by submission of the matter by both Parties to binding arbitration in accordance with the rules of the American Arbitration Association and the Arizona Uniform Arbitration Act, A.R.S. § 12-501 et seq., and judgment upon the award rendered by the arbitrator(s)may be entered in a court having jurisdiction. (00006071.DOC/4) 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT - 9- Article 8. General Terms and Conditions. 8.1. Term. This Agreement shall become effective upon its execution by all the Parties and the effective date of the resolution or action of the Town Council approving this Agreement (the " term of this Agreement shall begin on the Effective Date and, unless "Effective Date"). The � sooner terminated bythe mutual consent of the Parties, shall automatically terminate and shall thereafter be void for all purposes (a)when the total amount of all Reimbursement Payments(see equals ThirtyMillion Dollars ($30,000,000) or (b) on December 31 paragraph 6.4 above) q immediately followingthe earlier of (i)the twentieth anniversary of the Effective Date and (ii)the fifteenth anniversaryof the date the Interchange is completed by the Arizona Department of Transportation and first open for vehicular traffic and use by the general public. The Town at its option may record a document in the office of the Pima County Recorder which states the date the Interchange was completed bythe Arizona Department of Transportation and first open p for vehicular traffic and generalpublic.use bythe If the Parties determine that a longer period is e term of this Agreement may be extended by written agreement of necessary for any reason, th �' the Parties. la in exercisinganyright or remedy shall constitute a waiver of that right 8.2. Waiver. No delay or remedy, and no waiver bythe Town or the Owner/Developer of the non-performance of any covenant of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or any other covenant or condition of this Agreement. Party brings Attorney's Fees. If anybrin s a lawsuit against any other Party to enforce any of of this Agreement,terms, covenants or conditions or by reason of any non-performance of prevailing Partyshall bepaid all reasonable costs and reasonable attorneys' this Agreement, the p g fees by the other Party, jury.in an amount determined by the court and not by the Nothing in the "lawsuit" in the precedingsentence shall constitute a waiver of paragraph 7.4 use of the word above, requiring disputes to be resolved by binding arbitration. q g p 8.4. Counterparts. Agreementmay This be executed in two or more counterparts, each of Y which shall be deemed an original, but all of which together shall constitute one and the same from one or more counterparts may be removed from the Instrument. The signature pages counterparts and attached to a single instrument so that the signatures of all Parties may be physically attached to a single document. 8.5. Headings descriptiveheadings The headin s of this Agreement are intended to be used to assist in interpreting the meaning and construction of the provisions of this Agreement. � og 8.6. Recitals. The recitals set forth at the beginning of this Agreement are hereby acknowledged, confirmed to be accurate and incorporated here by reference. • ��• 8.7. Exhibits. Any exhibit attached to this Agreement shall be deemed to have been in this A eement byreference with the same force and effect as if fully set forth in incorporated gr' the body of this Agreement. Further Acts. Each of the Parties shall execute and deliver all documents and perform all 8.8. acts as rey necessary,, from time to time, to carry out the matter contemplated by this A �Y i of the foregoing, the Town shall cooperate in good Agreement. Without limiting the generality g g� andprocess promptly anyrequests and applications for plat or permit approvals or faith p p Y revisions, and other necessary approvals relating to the Development. { p0006071.DOC/41 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT - 10 - 8.9. Time Essence. Time is of the essence of each and every obligation by the Town and Owner/Developer under this Agreement. 8.10. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties pursuant to A.R.S. § 9-500.05 (D). Owner/Developer shall retain the right to receive Reimbursement Payments as provided by paragraph 6.4 of this Agreement regardless of the status of title or ownership of any or all of the Property unless Owner/Developer expressly assigns its rights to receive the Reimbursement Payments. No assignment, however, shall relieve either party of its obligations under this Agreement, except that an assignment by Owner/Developer in connection with the transfer of title to the Property shall relieve Owner/Developer of its obligations under this Agreement if the transferee agrees to be fully bound by the provisions of this Agreement. Any assignment by Owner/Developer shall be subject to the approval of the Town, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Owner/Developer may, without the Town's consent, assign this Agreement to any Affiliate of Owner/Developer, or any entity in which Owner/Developer or an Affiliate of Owner/Developer is a managing member or managing partner or any entity in which BARCLAY GROUP and KIMCO DEVELOPERS, INC. are owners. As used in this paragraph, the term "Affiliate" means any entity under common control with Owner/Developer. After assignment of rights as provided in this paragraph, the assignee shall receive the right to sales tax reimbursements under Article 6 of this Agreement to the extent of the assignment. 8.11. No Title Encumbrance. Notwithstanding the fact that this Agreement is being recorded in the Official Records of Pima County, it is intended that this Agreement shall not be an encumbrance upon the title of any person or entity purchasing or owning a portion of the Property, and that the terms and conditions of the Agreement are not covenants running with the land and that no person or entity is bound by (or entitled to) the burdens and benefits of this Agreement unless the burdens are expressly assumed by or the benefits are expressly assigned to that person or entity. 8.12. Lender Provisions. Notwithstanding paragraph 8.10 above, the Town is aware that financing for development, construction, and operation of the Development may be provided, in whole or in part, from time to time, by one or more third parties (collectively, "Lender"), and that Lender may request a collateral assignment of this Agreement as part of its collateral for its loan to Owner/Developer. The Town agrees that such collateral assignments are permissible without the consent of the Town. In the event of non-performance by Owner/Developer, the Town shall provide notice of non-performance to any Lender previously identified in writing to the Town at the same time notice is provided to Owner/Developer. If a Lender is permitted under the terms of its agreement with Owner/Developer to cure the non-performance and/or to assume Owner/Develo11. 's osition with resect to this A eement the Town a ees to recognize the p p p gr gr h. er rights of Lender and to otherwise permit Lender to assume such rights and obligations of Owner/Developer under this Agreement. p gr ment. Nothing contained in this Agreement shall be deemed .l. to prohibit, restrict, or limit in any way the right of a Lender to take title to all or any portion of the Property, pursuant to a foreclosure proceeding, trustee's sale, or deed in lieu of foreclosure. The Town shall, at any time upon request by Owner/Developer or Lender, provide to any Lender an estoppel certificate, acknowledgement of collateral assignment, or other document evidencing that this Agreement is in full force and effect, that it has not been amended or modified (or, if appropriate, specifying the amendment or modification), and that no non-performance by {00006071.DOC/4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT -11 - gr Agreement (or, if appropriate, specifying the nature and Owner/Developer exists under this duration of any existing non-performance) and certifying to such other matters reasonably or Lender. Upon request by a Lender, the Town will enter into a requested by Owner/Developerp gr' separate assumption 'sions of this or similar agreement with the Lender consistent with the provisions paragraph. intended bythis A eement to, and nothing contained in this 8.13. No Partnership. It is not � t anypartnership, joint venture or other arrangement between the Agreement shall, crea e p p Owner/Developer and the Town. Beneficiaries. No term orprovision of this Agreement is intended to, or 8.14. Third Party B enefi ci a art to this the benefit of anyperson, firm, organization or corporation not a party shall be for A eement, and no such other person, firm, organization or corporation shall have any right or Agreement, except that each present and future Anchor Tenant is cause of action under this gr � p 8.11 of this third partybeneficiary with respect to paragraphs 2.7 and hereby made a limited Agreement. Any Anchor Tenant is not made a third party beneficiary of any other term, in this Agreement. No Anchor Tenant shall have the right to provision or covenant contained �' ed in eementparagraphs 2.7 and 8.11. Except as provided enforce any provision of this Agr except� the sole this Agreement, this Agreement is made and entered into for paragraphs 2.7 and 8.11 of �' ther than the protection and benefit of the Parties and their permitted assigns, and no person o shall have any and their permitted assigns ri ght of action based upon any provision of this Agreement. shall,Other Instruments. Each Party prom tly upon the request of the other, have p delivered to the other any and all further instruments and assurances acknowledged and reasonably request orA appropriate to evidence or give effect to the provisions of this Agreement. ' ' Law. This Agreement does not relieve any Party of any 8.1 b. Imposition of Duty by �" obligation or responsibility imposed upon it by law.8.17. EntireAgreement. Agreement,This A eement, including the attached exhibits, constitutes the- Parties pertainingto the subject matter of this Agreement. All prior entire agreement between the and contemporaneous agreements, representation and understanding of the Parties, oral or gY' , written, are hereby superseded and merged in this Agreement. or addition shall be made to this Agreement except by a 8.18. Amendments. No change written amendment executed bythe Parties. The Parties agree to cooperate and in good faith gr pursue any amendments to this Agreement that are reasonably necessary to accomplish the goals plats or development plans governing the Property and Marana Spectrum expressed in the final p to this and superseded bythis Agreement. Within ten days after any amendment Plan as amended p at the expense ent it shall be recorded in the office of the Pima County Recorder by andp Agreem � of the Party requesting the amendment. ,` Plans. Subject to customary reservations by the architects and other design 8.19. Names and J copyrights to planstheOwner/Developer shall be the sole co is and specifications, professionals of ' programs,of all names, titles, plans, drawings, specifications, ideas, p gr ams, ideas, designs, and any p at time developed, formulated or prepared by or at the work products of every nature velo er in connection with the Property or any instance of the Owner/De plans; provided,Owner/Developer Wever that in connection with any conveyance of portions of the infrastructure as provided in ho , 12/18/2007 8:47 PM {000(16071•DOC/4{ MARANA SPECTRUM DEVELOPMENT AGREEMENT -12- this Agreement such rights pertaining to the portions of the infrastructure so conveyed shall be assigned to the extent that such rights are assignable, to the appropriate governmental authority. 8.20. Good Standing; Authority. The Owner/Developer represents and warrants to the Town that it is duly formed and validly existing under the laws of the state of Delaware and is authorized to do business in the state of Arizona. The Town represents and warrants to the Owner/Developer that it is an Arizona municipal corporation with authority to enter into this Agreement under applicable state laws. Each Party represents and warrants that the individual executing this Agreement on its behalf is authorized and empowered to bind the Party on whose behalf each such individual is signing. 8.21. Severability. If any provision of this Agreement is declared illegal, invalid or unenforceable, in whole or in part, under present or future laws, it shall be severed from the remainder of this Agreement, which shall otherwise remain in full force and effect. In lieu of the illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in terms to the illegal, invalid, or unenforceable provisions as may be possible and still be legal, valid, and enforceable, and this Agreement shall be deemed reformed accordingly. Without limiting the generality of the foregoing, if all or any portion of the payments required by the terms of this Agreement are determined, by a court of competent jurisdiction in a final non-appealable judgment, to be contrary to public policy or otherwise precluded, the parties shall utilize their reasonable, best efforts to promptly restructure and/or amend this Agreement, or to enter into a new agreement to afford the Owner/Developer the economic benefits of this Agreement in light of the benefits to the Town. 8.22. Governing Law. This Agreement is entered into in Arizona and shall be construed and interpreted under the laws of Arizona, and the Parties agree that any litigation or arbitration shall take place in Pima County, Arizona. Nothing in the use of the word "litigation" in the preceding sentence shall constitute a waiver of paragraph 7.4 above, requiring disputes to be resolved by binding arbitration. 8.23. Interpretation. This Agreement has been negotiated by the Town and the Owner/Developer, and no Party shall be deemed to have drafted this Agreement for purposes of construing any portion of this Agreement for or against any Party. 8.24. Recordation. The Town shall record this Agreement in its entirety in the office of the Pima County Recorder no later than ten days after it has been executed by the Town and the Owner/Developer. 8.25. No Owner/Developer Representations. Nothing contained in this Agreement shall be deemed to obligate the Town or the Owner/Developer to commence or complete any part or all of the development of the Property. 8.26. Approval. If any Party is required pursuant to this Agreement to give its prior written approval, consent or permission, such approval, consent or permission shall not be unreasonably withheld or delayed. any If j 8.27. Force Majeure. Party shall be unable to observe or perform any covenant or condition of this Agreement by reason of"force majeure," then the failure to observe orp erform such covenant or condition shall not constitute an event of non-performance under this Agreement so long as such Party shall use its commercially reasonable efforts to remedy with all reasonable dispatch the event or condition causing such inability and such event or condition can {00006071.DOC/4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT -13 - amount of time. "Force majeure" as used in this paragraph means be cured within a reasonable any condition or event not reasonably within the control of such Party, including without • strikes, lock-outs, or other disturbances of employer/employee limitation, "acts of God," acts ofpublic enemies; orders or restraints of any kind of government of the United relations; p thereof or anyof their departments, agencies, or officials, or of States or any state or subdivision p • • ' authority; insurrection; civil disturbances; riots; epidemics; landslides; any civil or military • earthquakes; subsidence; fires; hurricanes; storms; droughts; floods; arrests, restraints lightningr explosions; and partial or entire failure of utilities. Failure to settle of government and of people; disturbances of employer/employee relations or to settle legal or strikes, lock-outs and other p ' proceedings b acceding to the demands of the opposing party or parties, in either administrativep g Y case when such course is, judgment in the of such Party, unfavorable to a Party shall not constitute failure to use its best efforts to remedy such a condition. • Agreement is subject to A.R.S. § 38-511, which provides for 8.28. Conflict of Interest. This gr J cancellation of contracts in certain instances involving conflicts of interest. 8.29. Notices and Filings. All notices, filings, consents, approvals and other communications with this Agreement for in or given in connection shall be validly given, filed, made, ifin writingand delivered personally, sent via overnight national courier, transmitted or served or sent by registered'stered or certified United States mail, postage prepaid, if to (or to such other from time to time designate as any Party may in writing and deliver in a like manner): To the Town: Town Manager Town of Marana Marana Municipal Complex 11555 West Civic Center Drive,A3 Marana,Arizona 85653 To Owner/Developer:KIMCO BARCLAY MARANA,L.P. C/O BARCLAY GROUP VENTURE CAPITAL, L.L.C. 7702 E.Doubletree Ranch Road, Suite 220 Scottsdale,Arizona 85258 with a copy to: KIMCO DEVELOPERS INC. Att'n: Dan Slattery, Executive Vice President 1111 Burlington Avenue, Suite 113 Lisle, IL 60532 and: KIMCO REALTY CORPORATION Att'n: Ruth Mitteldorf 3333 New Hyde Park Road New Hyde Park,New York 11042-0020 . [Remainder of page intentionally left blank.] 119 Ei 00006071.DOC 4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT - 14- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the last date set forth below their respective signatures. TOWN: OWNER/DEVELOPER: THE TOWN OF MARANA, KIMCO BARCLAY MARANA, L.P., an Arizona municipal corporation a Delaware limited partnership /./ By: KD MARANA 1553,INC., r: _... a Delaware corporation, its general By: 1-1(/271- p= artner Ed Honea,Mayor Date: /1,2/ — f By: Name: ATTEST: Title: Date: /fa - yn C.6 ronson, Clerk APPROVED AS TO FORM: 7 F . C.` .idy, s wn Atto► ey STATE •F ARIZONA) ss County of Pima ) The foregoing instrument was acknowledged before me on by the of KD MARANA 1553, INC., a Delaware corporation, general partner of KIMCO BARCLAY MARANA, L.P., a Delaware limited partnership. My commission expires: Notary Public I 2 9 6 F (00006071.DOC/4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT - 15 - • • IN WITNESS WHEREOF, the Parties have executed this Agreement as of the last date set forth below their respective signatures. TOWN: O W NER/DEVELOPER: THE TOWN OF MARANA, KIMCO BARCLAY MARANA,L.P., an Arizona municipal corporation a Delaware limited partnership P By: KD MARANA 1553,INC., _ a Delaware corporation, its general By: p. 0,AN. Ed Honea,Mayor 'v'' Date: f1 ' y:% Name: Ianie . a Nti ry Title: Executive Vice Pres i•ent AITEST: Date: December 22, 2007 • • t Jocelyn C.Bronson,Clerk APPROVED AS TO FORM: Frank Cassidy,Town Attorney 11'nois STATE OF •4'4Y.C.4 DuPage ss County of ) December 22, 2007 Daniel C. Slattery The foregoing instrument was acknowledged before me o y , Vice Pres id the ExecutiveeatKD mARANA 1553, INC., a Delaware corporation, general partner of KIMCo BARCLAY MARANA,L.P.,a Delaware limited partnership. My commission expires: ?-14114 Notary Public ////?-0/P FiY P� `P'�¢'��-� WANDA A.UNDERWOOD 0FF,C1AL MY COMMISSION EXPIRES N�r�s. SEPTEMBER 11,2010OF »v, {00006071.D0C/4) 12/18/2007 8:471 • MARANA SPEc1 RUM DEVELOPMENT AGREEMENT _15_ • � �.....�._._... .__._,.........�.. y Saar - --_- _�_... ._....._.�.r.. ., _.. LIST OF EXHIBITS A. Legal description of the Property B. Conceptual description of the master site plan for the Development C. Description of the Public Improvements 4 1 g {00006071.DOC/4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT EXHIBIT A -16- A a EXHIBIT A Legal description of the Property :f: J M 2 1 1 19 (00006071.DOC/4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT EXHIBIT A 4. EXH1BTA ► . Legal Description A parcel of land located within a portion of the Northwest quarter of Section 22, Township 12 South,Range 12 East,of the Gila and Salt River Base and Meridian,Pima County,Arizona,more particularly described as follows: Commencing at the North quarter corner of Section 22; . Thence S 00°25'O6"E 51.89 feet,along the East line of the northwest quarter of saki tea Section 22,to a point; Thence leaving said East line, S 89°34'54"W 30.00 feet,to a point on the West right-of- way line of Camino De Manana,as recorded in Road Maps Book 2,Pages 1-4, Pinna County Records,said point also marking the Point of Beginning; • Thence S 00°25'06"E 1,224.75 feet,along said West right-of-way line,to a point on the f . • northerly boundary line of Unisource Energy Corporation,as recorded in Docket 2363, Page 94, Pima County Records; Thence N 34°51'57"W 871.54 feet,along said northerly boundary line,to the beginning of a 7829.44 foot radius non-tangent curve to the left„ having a radial bearing of N 35°2T41"W; Thence leaving said northerly boundary line, and along said curve,58.18 feet,through a central angle of 00°25'33",to a point; Thence N 42°16'10"E 593.87 feet,to the beginning of a 7729.44 foot radius non-tangent curve to the left,having a radial bearing of N 40°11'58"W; Thence alongcurve, " said 55.91 feet,through a central angle of 00°'24 52 ,to the Point of Beginning. Together with a parcel of land located within a portion of the Northeast quarter of Section 22,and a portion within the Southeast quarter of Section 15,Township 12 South,Range 12 East,of the Gila and Salt River Base and Meridian,Pima County, Arizona, more particularly described as follows: Commencing at the North quarter corner of Section 22; Thence N 89'45'16"E 31.09 feet,along the North line of the northeast quarter of said Section 22,to a point on the East right-of-way line of Camino De Manana,as recorded in Road Maps Book 2, Pages 1-4, Pima County Records,and the beginning of a 379.26 u • foot radius non-tangent curve the right,having a radial bearing of S86°04'08"E,said 1' point also marking the Point of Beginning; 1, i Thence leaving said North line, along said curve and said East right-of-way line,30.19 feet,through a central angle of 04°33'44",to a point; t• s A I •L Z• r 1 -o# line,N 89°45'16"E 30.54 feet,to the beginning of Thence leaving said East right-of-way a T729.44 foot radius non tangent curve to the left,having a radial bearing of i N 41°32'37"W; IIfi through Thence along the curve,128.00 feet, a central angle of 00°56'56',to the beginningof a 7549.44 foot radius reverse curve the right through a central angle of 04°00'46",to a Thence along said reverse curve,528.73 feet, g �. point; ; • Thence N 51°31'13"E 610.78 feet,to the beginning of a 40.00 foot radius curve to the ;. ; n .9ht; 90°10'00",to a point; 1 Thence along said curve,62.95 feet,through a central angle of P Thence S 381847*'E 412.88 feet,to the beginning of a 1507.39 foot radius curve to the left' j said curve, 1366.29 feet,through a central angle of 51°55'57",to a point; Thence along the northeast quarter of Thence N 89°4516"E 87.91 feet,to a point of the East line of said Section 22, I quarter corner of Thence S 00°19158"E 2,558.47 feet,along said East line,to the East q said Section 22; i. Thence S89°45'49"W 1,621.14 feet,along the South line of the northeast quarter,of � said Section 22,to a point on the northerly boundary line of Unisource Energy tion as recorded in Docket 2363,Page 94,Pinna County Records,and the Corpora s in of a 11272.37 foot radius non-tangent curve to the right,having a radial beginning bearing of N 48°03'25"E, Thence leavingsaid South line and along said curve and said northerly boundary line, 1603.23 feet,through a central angle of 08°08'56",to a point on said East right-of-way : line of Camino De Manana; 1 • i Thence leavingsaid northerly boundary line, N 00°25'06"W 1,334.45 feet,along said l the beginning of a 379.26 foot radius non-tangent curve to the East right-of-way line, to eg ng1 right,having a radial bearing of N 89'23'42"E; 1 and continuingalongsaid East right-of-way line,30.02 feet, L Thence along said curve through a central angle of 04°32'10",to the Point of Beginning. ' .� The total area of the two parcels contains:t 7,315,255 square feet or±167.9352 acres, more or less. o LAN) ,,c, _ , See attached exhibit`A'. - • Q �A 0 :'' ! • r%e0 .- 6101PPP . f' 1; ' i , ,. - t DETAIL 'A' 1 T r •-a, . ,0 1 i �` I 1 C> 10 i0, BL4 . co m,.)_ . POINT OF COMMENCEMENT z n POINT OF BEGINNING 1 oc i 13(.... PARCEL2 NORTH 1/4 COR. SEC. 22 ! - N89'45'16'E 2629.14' = k S00'25'06"E 51.89' v cJ 0 L A ip POINT OF BEGINNING ,� ,c ‘ A7F „pi. , PARCEL 1 T � �" ,,, ` o � 1 f , w 36326 • 0 to C.:/' g cv I RtCHARo A. ; R) i2 STOCKMAN I aG ,o, LL., o (7,014,993 S.E. s „ _ ..3 ±161.0421 ACRES '�,= i�� 7 ), co -d- In f; ' : - ? g 60' CAMINO rn I cry co DE MANANA j AREA Mica#1 w gffEiNIME , ±300,262 S.F. . ±7,315,255 S.F.I ±6.8931 ACRES f 167,9 352 ACRES j 1 � 11� ! S BOUNDARY UNE TABLE BOUNDARY CURVE TABLE BEARING DISTANCE CURVE LENGTH RADIUS DELTA RAD.BRG. LINE � { BL1 SOO'25'06"E 1224.75' ' BC1 58.18' , 7829.44' 025'33' N35'27'41'W 6L2 N34'51'57"W 871.54' BC2 55.91' 7729.44' 0'2452 '11'58'W 7' , ' ' N40 BC3 4'3344S860408'°E` BL330.19' 379.26' 4'33'44* ' ' N42`1 fi i 4 E 593 8 _ BL4 i N89'45'16"E 30.54' BC4 128.00' 7729.44' 0'56'56" _N 41'32'37"W BL5 N51'31'13"E 610.78' BC5 528.73' 7549.4' 4'00'46' BLS 538'18'47"E 412.88' ' BC6 62.95' 40.00' 9010'00"' BC7 1366.29' 1507.39' 51'55'57" BL7 N89'45'16"E 87.91' �� BL8 S00'19'58"E 2558.47' , BC8 1603.23' 11272.37'. 8'Q8'56' N48'03'25'E s BL9 S89'45'49"W 1621.14' BC9 30.02' 379.26' 4'32'10* _N89'23'42"E BL10 NO0'25'06"W 1334.45' ql P- 4. V, R PROJECT NO. EXHIBITRA$ DATE 08/'1412007 NIT IL nor w•«bap Mb aoor.r+�u OM MARANA SPECTRUMBY: 8K2 �maim= s.���°" PIMA COUNTY,ARIZONA SCALA T a 100' ,,,,�„�...,,.... .>,/�,.,i.1...C!..M'�. SHEET NO. 1 OF 2 +. i , i ... i. SITE AREA PARCEL tt SITE AREA PARcEL #Z I CA co Q- 4, ta ±300,262 Stj .F. ±7,014,993 S.F. 36326 • 0 , w(3 ±6.8931 ACRES ±161.0421 ACRES cc RICHARD A. cAtallo DE mANANASTOCKMAN 0 , 15? 41. . f y•-• • SW 1/4. SEC. 15, SE 1/4. SEC. 15, •-...!...i‘i...,."or • ,,„. . , , ..... cNT , .• , Ti 2S, R12E T12S, R12E BC6 I iii /cNi CAMINO DE MANANA ig POINT OF COMMENCEMENT c•I . NORTH 1/4 COR. SEC. 22, ..• ' --, cC E T12S, R12E 0 , cN P.O.B. PARCEL ri , • SEE DETAIL *A" r N89'45'16E2629.14' . . • • • , _ — PARCEL #1 '4 I ' P.0.8. PARCEL 02 i . ••• . , • , • , BL7 SEE DETAIL *A* : ! BC1 > <2) -4- C. -' SEE DETAIL *A* ei i St% 0 NI a) 2 -11146,.., fa CAMINO DE MANANA <('` Np SNIk 1 1 00 —.1 PARCEL *2 co 1- do 1 104, I gs Li 130 o it In cN • z \ . crw— cp • t CP c.) — N—S MID—SECTION LINE • 1,- -4-1— NO0'25'06.W 2633.06' • •---- 04 CENTER OF SEC. 22, 1004.06' BL9 I. ! .• T12S, R12E ' — S89'45 49"W 2625.20' _....- 1.1 • 12 OVERALL SIIE AREA: I -±7,315,255 S.F. icl 1 ±167.9352 ACRES ,) ! 1 7 1 .....---------------.... ...v I a -.3 PROJECT NO. 6852B0P 0 0 .1 • 11410N - I NO. EXHIBIT 'A* DATE 08t14/ 007 'ARAM BY: E31(2 • Mk 11116 Swot Oat ONO Ikalhokie.AZ UM SPECTRUM Tat 1111MMIC100 Pm 1011,2103911 SCALE l''ni 600' PIMA COUNTY.ARIZONA . 111.11100•110•1111011•WIMMAI 1.0.111111 •IIMPINI SHEET NO. 2 OF 2 ir _•• ............___.............••..........•...• . . • .•••••_...•........._.....______ . EXHIBIT B Conceptual description of the master site plan for the Development 9 5 {00006071.DOC/4} 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT EXHIBIT B . . . . \-........" -.-• ... .._. ,. ........- .„_,...- i E .._. -• -:::. ......- _._....• . . ,-- 1 ,• .......- • ....- 11-----------1 , .. I .....-- .,. ... ..,- .,:• .-.7-7 E ; D .... , •. __ ..::::::::::::•••:::::„>:-.-'" 8= • • 1 • , ,. 1 W "a • Z . , AAA I . • .',..,... (:lieg 0 ® > . • NN ; • , p! ....,,, ........1, , i ..111-11-........-:...-. - '1"\\ 777 -.'A • .- .... ..- - --;,•4•" --. 5 74 ® • -.,-.-i _--• • 1' -‘110' •-.• .• ." = • -- ,.,'"--- . -- • E .,:. _. i _ . 0.\ .11:. ,r ....: .' • ' ..N !' •;,- .0 4-- 4°A.' ',./\'' \..‘ 0 t,i- (.,..,, ,.-, • - , -.--..‘de A• •1 .." (.-- - . . , .. .- • '\. \'-',N. ' • . ''' • ii• ', *.. . ''.. • .. . ' -.. • — ,--‘," k,„,,'' .. .-:.. ' -N . . '',./ .4'„ 4. ,- iiili :. lip .... . .. : , . - , 1. 1444,_ /....,...: •• • :...',-.'',.,.•..', *. 7....44, • ... •,,,,.-- / • , x . '.. '... \-.3P141 • -sviAk ' / /11k.' si i Ns...* s... s• ' -. ':. , ;" .., "• * . •., . .., . ,1107....--Aiki., •. , -,. • ...' . ... •Airodk, ,A ;,.--AN •- , .. -,. ,.. . ., .,.... ..• \ .,:///‘:'W. • iiiiii -1 Ekk ,,.N\414f .-14 ; - :- 'C:''''',:.'.: - .'''.. ... . t,.; 4 °;i1*.'''.- / ',ill!, ;., ''-..-,\\. ...-'0'. . ' - - '' ..-;.1.'-' •;.. . if-%`,/ g aminimmasy. - 114, '. .•., ,A\ "t''..' '. •... . :. ::._-1 .. ,.-.::..i -... -''. 41.# ' I:.s,IF,.*:,,,,,7,-Y • :• •.IL Ami ' ;" 7' ,• Vi., .;:,'. .,.,, '11. \.,.. 11,L , _. •.' ,. s.. : :. N: \ 1 :___,,‘;1.17:, .. Vk • !: 7. - .... T....1..........-. c, .,...:. g. G c, •••••• plirn ;I-417 I . _... ,..t.., -, ,. -\- - - • .. : .. a .,..,...: 411 . A ... i.. .• • _71 e , 3 i - ,13 1'21 I 0 ... C5A 9 . "7 1 pc 6 ........................... ..................... PFlOJECT NO.40013862W COMMUNITY IMPROVEMENTS .-- . • 1. 4 • MI I P. •• DATE 084.07 MARANA SPECTRUM 1111,1111111.im Oft 411111111.010 AMIN BY: APC E1ARCLAY GROUP ........ ...asiWane SHEET NO. FIGURE 1 IWARAN/1/4 ARIZONA ........•••••••••...................... ,,,, • - - - - ___ _. EXHIBIT C Description of the Public Improvements 3 n 1. a' r {00006071.DOC/41 12/18/2007 8:47 PM MARANA SPECTRUM DEVELOPMENT AGREEMENT EXHIBIT C Exhibit C Scope of Work Marana Spectrum Drainage 1300 cfs Drainage Channel Excavation Gabion/Shot Crete Lining Landscaping Transition at Railway Drop Structures/Grade Control • 800 cfs Drainage Channel Excavation • Concrete Structural Lining • 1,100 cfs Wash Enclosure } 1100 cfs wash enclosure (con-arch or CSP equivalent to twin 5x7 box) 1100 cfs open channel d/s of Twin Peaks Utility Relocations d/s of Twin Peaks 1,100 cfs Wash Culvert 1100 cfs culvert @ Twin Peaks Road Building s` Constructed by Developer Bus Pullout Traffic Signals at Lee Driveway Traffic Signals at Twin Peaks mid-block Deceleration Lanes Constructed by Town of Marana , . ! Median Break at Lee Reconstruct Camino De Manana . Median Break at unsignalized full moves access to Barclay "7 Bridge Q-I-10/Twin Peaks Road TI Underpass Linda Vista-2 Extra Lanes and Double Left Hand Turn at Twin Peaks Twin Peaks New Lanes Exhibit C - 1 00007481.1 • • Exhibit C continued Water Supply/Fire Protection • Fire Storage Tank(840,000 gallon) Land for Storage Tank New 12"parallel well feed from site to existing Town storage Tank New 16" Z-Zone Water Main New Well Feed on Camino De Marna and Linda Vista(24" ductile Iron) • New Hydrants on Linda Vista and Twin Peaks PRV at Z-Zone Booster Station -Hartman Vista Reservoir Site Public Sewer Improvements Reconstruct public 10"to 12"Oasis Hills Outfall New public 8" sub-trunk to SE property corner per Pima County New public 15" sewer to south west property limits New steel sleeve at Twin Peaks Crossing New 15" public sewer crossing Twin Peaks to existing manhole Offsite Regional Trunk Sewer Improvements yI, , Exhibit C-2 00007481.1 • � r Exhibit C Page3 Summary Community Improvements Marana Spectrum f. 12/21/2007 Good Faith Cost Estimate } Item Total Developer Total Town I Total Item Cost Drainage $6,580,000 $1,030,000 $7,610,000 Road Building $940,000 $4,080,000 $5,020,000 Water Supply/Fite Protection $2,960,000 $2,960,000 Sewerp Improvements $1,050,000 $1,050,000 Total $11,530,0001 $5,110,0001 $16,640,000 Consulting 15% Contingency 10% s tl 2 i i y ti 1 • Attachment "C" C O o C L (A 'OC a) C IP C Q) O � 5 -0 � Q) Q) L O U) +r C o ct-o U Q .� C •C Q) O O O U) U) c ii C Q) "D a) -p p V) c/) (/) Q) 0)•— Q Q) O a) c O > c .o c c Q -� 000QQQ — QQQ c Q) p Q > `i) a_ u) QQ a) C m U - C (a ` O O O C Q C a3 Q) cn u W Q u a_ _l LL Z ZZZZZZZ Z ZZZ 0 U O _0 w u) ca Z Z C ca a) a) > -o a) Q) °' O (a C c O Q a) Eo 0 C U - Q czcc c o UE j oQ C >, O = U c o cn — C (}a c C o clEci) .., .y _ _ v .v _ _ o c c Oc - - o a) .c° a) a) a) a) a) Q) Q) c o LQQ a. a. 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D DDD D 0 2 D D D ° o D D D °) O C 0 a < con O. = CD ° C) E H n) - • D a d X Cl cD Avondale , AZ City uf Avnlet' ` Phone `3:33a1400 ""ildit tj a Economic Development Office Fax 623,333.0140 114E W. Civic Center Lei,., Suite 210 4 ,r Avondale, Arizona 85223 An d you are in the driver's s seat. Av'ondale' , .''lvi.Y.v'.`N.."..LJC16v`FD$ASt... +Tela• g� 'Y . < :��j;•,$@ `' ., 7: s 4'i'.A 3.h JAsuti...rb•K .,y,. ^\ S'; � ��''`h'+Yf� BusinessAssistance The City of Avondale is committed to supporting the businesses within our community. Your existing, expanding or relocating business is a valuable asset to Avondale. Businesses like yours provide jobs,services, and a tax base that enhances and preserves our city's quality of life. Below is a list of local,regional,and state business assistance programs. Site Selection The City of Avondale can assist companies with identifying available sites. The City works closely with the local real estate brokerage community to provide the most up-to-date information on availability of sites. The City also has an extensive database on available land sites,and on-going relationships with local developers and landowners. Development Review The City of Avondale provides excellent customer service throughout the development process and works closely with companies to ensure that project reviews are done in a timely manner. The City Development Services De- partment is committed to working with businesses on planning,zoning,and permitting issues. City o Avondale Commercial In ill Incentive The commercial infill incentive was created to encourage development of commercial uses through reduced fees and other incentives in city areas which are vacant or otherwise underutilized. Building pand plan review fees Eligible projects within the commercial infill incentive districts shall receive a waiver of 50% of the building permits and plan review fees established by the city council. Sales Tax Rebates All eligible new businesses within each commercial infill incentive district can apply for a rebate of all sales taxes paid to the City of Avondale for .75% of the taxable sales generated to the business in the commercial infill incen- tive district, up to a maximum rebate of $5,000 annually and subject to the criteria set forth in Ordinance 1070-04. Work Force Development The City of Avondale works closely with the Maricopa Community College District to assist companies with their workforce needs. The Arizona Work Force Recruitment and Job Training program provides short-term customized grants for the training of net new employees. The program is administered in coordination with training providers such as community colleges, private post-secondary institutions,trade schools,or the applicant itself. The program funds up to 75% of total eligible costs,with the company contributing the other 25%. Recent awards range from $300 to $1,000 per employee. IT (Information Technology) Tax Credits Available to businesses as a 50-50 match for training up to 20 employees in IT skills during calendar year. The set aside is caped at $5,000,000 with half the fund earmar4ked for corporations (5,C, LL),and the other half for sole proprietorships and partnerships. The per-employee tax credit cannot exceed $1,500 and if the total number of qualifying applications exceeds the capped amount,the per-employee credit will be reduced proportionally. • ;::,>.`}". "W::ut.^`{�..,:. •..F 3'x>^F:Ft.:i:6'9Cal(<.•.i:V•t0':.s:^ .. :�.i* `• .... .iwcA,:... k:Ao 4'�u.x.::4:...::r•+•x1J•xh i«w� ...i^ '+a..i. ..�:.h! i(-- ........`V.W`a?.i�A?:.:�.:.� �w::.�.:v.�.: • • `::%�'2 'e..S?i�".'nG F'.'f..C.^Yo'x.T..t.;..^.`✓.'� .:♦C`ik,' '...•...tr:...O.C.£ 'v :..�x.. ...i:y,r: .".vd'.-x.... • fi Accelerated Depreciation Businesses with class 73 and 74 personal property may qualify for a four-year accelerated depreciation. This ac- celerated depreciation reduces the full cash value of the property by 40% the first tax year,56% of the scheduled depreciated value the second year,72% of the scheduled depreciated value the third year and 88% of the sched- uled depreciated value the fourth year. In year five, the schedule reverts to the original level. Economic Strength Projects ESP Grants ESP grants are available for the construction of transportation infrastructure directly related to new or expand- ing development projects. Matching funds are required. Sales Tax Exemption kkp Arizona exempts the sales of machinery used directly in manufacturing from both the state transaction privilege and use taxes. Commercial Solar Energy Tax Credit Program r.. An Arizona income tax credit is offered to businesses that install one or more solar energy devices in their Arizona facilities.The tax credit is equal to 10% of the installed cost of the solar energy device not to exceed F $25,000 in credits for one building in a single tax year and $50,000 total credits per business per tax year.Tax credits can be used to offset Arizona income tax liability;any unused credit amounts can be carried forward for a five-year period.The tax credit is available for tax years beginning from and after December 31,2005 through December 31, 2012. Tax credits are authorized on a first come,first served basis,according to a priority place- ment number issued by Commerce.Senate Bill 2429,which established the Solar Energy Tax Credit Program, also provides a personal property exemption on solar energy devices used for the production of solar energy for on-site consumption. Western Maricopa Enterprise Zone (WMEZ The WMEZ program provides New Job Tax Credits and Reduced Property Taxes for Manufacturers to qualifying companies that create jobs and do business within an enterprise zone. New Job Tax Credits are income/premium tax credits up to $3,000 for each new job over a 3-year period,with a maximum of 200 new jobs per taxpayer in any given year. Reduced Property Taxes for Manufacturers are reclassification of real and personal property for 5 years of reduced taxes —a savings of about 40% to 60%.This reduction applies only to primary property taxes. Motion Picture Production Tax Incentives Program The Motion Picture Production Tax Incentives Program,administered by the Arizona Department of Commerce, focuses on promoting the motion picture industry in Arizona by providing tax incentives to qualified motion picture production companies that are primarily engaged in the business of producing motion pictures, have a physical office and bank account in Arizona, incur Arizona production costs of at least $250,000 in a twelve- month period,and employ a certain percentage of Arizona residents. Incentives include transaction privilege tax exemption for machinery,equipment,or tangible personal property;job printing, engraving, embossing,or copy- leases or rentals of lodging space;catered food,drink,and condiments;and construction contracts. Income tax credits are based on expenses in Arizona directly attributable to the production and can be used to offset Arizona tax liability. The tax credits may be used,sold or transferred; unused tax credit amounts may be carried forward for up to five taxable years. Small Business Capital Investment Tax Incentive Program "Angel Investment Program" The Angel Investment program aims to expand early stage investments in qualified Arizona small businesses, including rural, bioscience,or other qualified small businesses.The program provides tax credits to investors who make capital investment in small businesses certified by the Arizona Department of Commerce. F x Y.A. ,.. .. .. r s:.t...^'., "rk ... • . '. `1 y aroi<: ♦ x:i 6v '. .'..,.. a .•.x.>.-.,u:x-x.:'-.w..'� ' •,a.:.°k.:.... ..wx. ...'''"¢,,ear `S'�`"d.:X`l"v _ ..:r.,� a ...r ,xae. .!f". er. .. ,.. ... .w. t>a:-- Bullhead City , AZ AR 7-1 CITY OF BULLHEAD CITY ADMINISTRATIVE REGULATION ECONOMIC DEVELOPMENT 1.1 PURPOSE The purpose of this regulation is to define policy for the promotion, attraction and expansion of business and/or tourist opportunities that will diversify and enhance the tax base of the community through the creation of new jobs, capital investment and sales tax revenues. 1.2 POLICY All activities of the Economic Development Department shall be conducted in such a manner to portray a true and accurate representation of the City, the residents of Bullhead City and the area in general. Activities may include media placements; participation in trade shows, conventions, conferences or seminars; distribution of collateral materials or direct mail campaigns; representation on public or private boards, commissions, task force or authorities and through personal contact. 1.3 PROCEDURE A. Collection of Information: The Economic Development Director and/or designee shall collect information relevant to the trends and characteristics of the economic growth of the community and create databases to track information such as, but not limited to: demographics, zoning and land use, available land and buildings including listing brokers, and contact information pertaining to leads, prospects, local and state officials and interested parties. Information will be collected from reliable sources and appropriately referenced as utilized. B. Economic Development Element of the General Plan: The Economic Development Director and/or designee shall participate with the Planning and Zoning Division of the Community Development Department to formulate an Economic Development Element of the General Plan. All planning policies and practices shall be adhered to in the formulation of the Economic Development Element of the General Plan and any updates which may be contemplated. C. Target Marketing Analysis and Media Placement Plan: In accordance with the goals and objectives developed within the Economic Development Element of the General Plan, the Economic Development Director and/or designee shall prepare a Target Market Analysis and Media Placement Plan to provide guidance in any national, state or local advertising to be purchased; to anticipate participation in trade shows, conventions, conferences and seminars; and to schedule future prospect visits and analyze methods for the distribution of collateral materials. Marketing analysis would Administrative Rules and Regulations -1- Adopted:June 20,2000 AR 7,1 match targeted cluster groups with the appropriate medium and determine both the costs associated with the promotional venture and an anticipated return on investment (ROI) by number of leads, prospects or contacts generated. 1. The Media Placement Plan would be a one year calendar showing the anticipated schedule of events for media placement, participation in trade shows, prospect visits or distribution of materials. 2. Advertisements in electronic, print or other mediums are considered single source providers and will be made in accordance with the Media Placement Plan and Target Market Analysis, defining costs and return on investment. 3. Participation in trade shows, conventions, conferences or seminars will be done in accordance with the Target Market Analysis. Partnering efforts with other governmental entities or interested parties will be encouraged to reduce costs. Information displayed and distributed at trade shows, conferences and seminars will be impartial and represent the City in a positive and honest manner. 4. Development and distribution of Collateral Materials will also be made in accordance with the Target Market Analysis. Professional services assisting in the design, preparation and printing of collateral materials will be let in accordance with AR 2-2, Selection of Professional Services. D. Representation on Boards, Commissions, Task Forces and Authorities: When invited to participate or assigned to a board, commission, task force or authority, the Economic Development Director and/or designee shall perform duties in a professional manner and make decisions in accordance with the goals and objectives established in the Economic Development Element of the General Plan. E. Partners in Economic Development: The City shall encourage informal partnerships with those entities interested in expanding the economic base of the community. Partners for economic development include but are not limited to utility companies, community college districts, high school districts, real estate companies, lenders, chambers of commerce and other governmental entities. F. Personal Contact/Contact Management: The Economic Development Department shall represent the City of Bullhead City in an honest and professional manner when interacting with the city residents, leads, prospects or partners in Economic Development. Information obtained through personal contacts via meetings, telephone or written correspondence shall be documented, analyzed and acted on accordingly. Administrative Rules and Regulations -2- Adopted:June 20,2000 • AR 7-2 CITY OF BULLHEAD CITY ADMINISTRATIVE REGULATION INCENTIVES 2.1 PURPOSE Successful marketing and attracting major development generally requires a public/private partnership. The City recognizes that economic incentives may be required to compete for projects that create new employment opportunities for the citizens of Bullhead City in targeted business clusters such as: communication industries, standard manufacturing, offices, education and health care firms or major retail sales tax generators. 2.2 POLICY Bullhead City may utilize incentives to be a catalyst for projects that create new employment opportunities for the residents of the community. Targeted business clusters such as communication industries, standard manufacturing, offices, education and health care firms or major retail sales tax generators, may qualify for economic incentives. 2.3 AUTHORITY Arizona Revised Statutes (ARS) .9-500.05 authorizes cities to enter into development agreements. ARS .9-500.11 authorizes a city to appropriate and spend public monies for and in conjunction with economic development activities. 2.4 DEFINITIONS Economic development activities as defined in the statute means any project, assistance, undertaking, program or study within the boundaries of a city. Economic development activities authorized by the statute include the acquisition, improvement, leasing or conveyance of real or personal property that the governing body of the City has determined will assist in the creation or retention of jobs or otherwise enhance the economic welfare of the inhabitants of the City. 2.5 POLICIES A. City Option: It is the City4s option to offer economic incentives. B. Coordinated Efforts: The City will coordinate with state and federal funding sources to maximize the value of an incentive offering. C. Incentive Purposes: Economic incentives may be used to retain, expand and attract new industries, major retail sales tax generators and/or mixed-use developments. Administrative Rules and Regulations -1- Adopted:June 20,2000 AR 772 D. Incentive Analysis: Prior to economic incentives being offered, the Economic Development Director or designee shall analyze the tax impacts of the proposed project on the community and the Cityos return on investment (ROI) in relation to a potential economic incentive. E. Quality Development Standards: The City shall not waive or relax quality development standards by offering economic incentives. F. Restrictions: The City shall not utilize fees collected for water resources or sewer connections in an incentive offering. Administrative Rules and Regulations -2- Adopted:June 20,2000 Flagstaff, AZ CITY OF FLAGSTAFF INCENTIVE POLICY Mission of the City of Flagstaff's Economic Development Program To lead in building a stronger and more diversified economy by promoting increased collaboration between the public and private sector and delivering business initiatives focused on retaining and growing local businesses while attracting new investment and quality job growth, enhancing the competitiveness and long term sustainability of Flagstaff The City of Flagstaff has a number of programs, financial and non-financial, to assist existing local businesses as well as those that may be considering locating to the community. Targeted Industries Government offices Entrepreneurial companies Biosciences Research and Development Medical Devices Health Care Education Clean Energy Software Development Tourism/Entertainment Air-side companies for Air Park Criteria for incentive assistance • Business retention projects that preserve at least 20 existing full-time positions. These projects should stabilize or expand an existing business and work to increase wages and benefits. • Business attraction projects that add at least 10 quality jobs in a targeted industry. A quality job is defined as a full time position that pays 25 percent above the prevailing median wage for Coconino County as defined by the Arizona Department of Economic Security and the employer offers benefits including medical, vacation and sick pay. • Business attraction projects that bring a unique and needed product or service to the community that adds quality jobs and generates significant revenue • Central Business District redevelopment projects that create new jobs and/or new sales tax revenues, increase property valuations, or improve the site and the surrounding areas by removing blighted or unsightly conditions. Projects that include the substantial rehabilitation of a building could qualify. • Redevelopment projects or infill projects that enhance the Downtown area as a center of commerce and entertainment district for residents and visitors. • All requests will be evaluated on an individual basis by the Economic Development staff and the City Manager's office. Final agreements must be reviewed by the Northern Arizona Economic Development Advisory Committee and approved by the Flagstaff City Council. Florence , AZ ,—:-,, ,'��J��� fR Vii:. �I .low , ,4 ,.,\ TOWN OF FLORENCE kiir.1�.V,�I��'M':.t.OF F•RAIfV RE 7C .N , A a � irr V �i 1 ,,, Cyt o-ir� ./ k cS; u .s�'y,•xa,� ,, - 3sD L yy. -' _....„— ECONOMIC DEVELOPMENT INCENTIVE Policy & Administration D P.O. Box 2670 775 North Main Street Florence, Arizona 85232 (520) 868-7500 .town.florence.az.us February 4, 2008 ECONOMIC DEVELOPMENT INCENTIVE POLICY Section 1. Definitions Section 2. Authorization to rebate fees, Town sales tax revenues and expend public funds in furtherance of economic development in the Town Section 3. Council Approval or Town Manager Approval Section 4. Criteria Section 5. Agreement Required Section 6. Developer Obligations Section 7. Reports to the Council Section 8. Retail Development Tax Incentive Agreement Section 1. Definitions Unless otherwise indicated, terms shall have the following meanings: A. "New industrial or commercial project" shall mean an enterprise which is different in function from the land use or enterprise in the location being considered for incentives or enhancements. B. Expansion of an "existing industrial or commercial project" shall mean an increase in the land, buildings, equipment or machinery of an enterprise which is the same in function as the existing land use or enterprise in the location being considered for incentives or enhancements. C. "Compliance period" shall mean the time period specified in the agreement between the recipient and the Town during which the recipient shall comply with the Section 4 criteria on which it supported its eligibility for the incentives or enhancements in Section 2. The compliance period may be longer than the time period for payment of the incentives or enhancements to the recipient. D. "Retail" shall mean the sale of tangible personal property, except the sale of tangible personal property to a person who is engaged in the business of selling such property. (A.R.S. 9- 500.11). E. "Retail business facility" means a store, warehouse or other improvement to real estate where at least one-half of the business conducted on the premises consists of retail sales of tangible personal property to the ultimate consumer, measured by either the number of employees assigned to retail sales or the square footage of the facility used for retail sales. For the purposes of this paragraph, retail sales does not include (A.R.S. 42-6010): 1. Sales of food and beverage for consumption on the premises of the facility. 2. The distribution without charge of promotional products that display the company logo or trademark. 3. Sales solely to company employees. Economic Development Incentive Policy Page 2 of 7 F. "Expenditure" shall include any waiver, exemption, deduction, credit, rebate, discount, deferral or other abatement or reduction of the normal municipal tax liability that otherwise applies to similar existing business entities and properties in that municipality, however denominated, computed or applied, and that is generally understood as an inducement to locate a business facility or other operation in the municipality (A.R.S. 9-500.11). G. "Retail development activities" shall mean those economic development activities that involve the acquisition, improvement, leasing or conveyance of improved or unimproved real or personal property or other activity to facilitate the sale of goods at retail, including the sale of automobiles, or to facilitate other activities, including theatre and restaurant development, that generate revenues that are subject to municipal transaction privilege taxation (A.R.S. 9- 500.11). H. "Retail development tax incentive agreement" shall mean an agreement between a municipality and a person engaged in or planning to engage in retail development activities within that municipality in which the municipality agrees to pay, refund, credit, rebate or otherwise provide to that person all or a portion of the sales, use or transaction privilege taxes payable to that municipality in connection with the construction, development or operation of the retail development activities (A.R.S. 9-500.11). Section 2. Authorization to rebate fees, Town sales tax revenues and expand public funds in furtherance of economic development in the Town. The Town may encourage economic development and authorize expenditures of pubic monies, the rebate of certain fees, except development fees enacted pursuant to the authority of Arizona Revised Statutes (A.R.S.) 9-463.05, taxes or provide construction of off-site public improvements including, but not limited to,the following: A. Any or all fees required to be paid in connection with the construction or expansion of a retail, commercial, or industrial project, including, but not limited to, impact fees, development fees, plan review fees, permit fees, inspection fees, and utility connection fees. B. General funds to pay the costs of construction of off-site public improvements which the Town determines are required to be constructed in connection with a commercial or industrial project. C. All or a portion of the sales tax revenues levied, generated and received by the Town as a result of the construction of a new, or expansion of an existing, retail, commercial, or industrial project unless such sales tax revenues are subject to a prior senior pledge. D. All or a portion of the property tax revenues levied, generated and received by the Town as a result of the construction of a new, or expansion of an existing, retail, commercial, or industrial project unless such tax revenues are subject to a prior senior pledge. Economic Development Incentive Policy Page 3 of 7 E. Reduce parking requirements, purchase and donate land, and waive any or all fees for operations located entirely within the Downtown Redevelopment District. Section 3. Council Approval or Town Manager Approval If the aggregate of the fees, costs of the Town-constructed improvements and sales or property tax rebate is more than $50,000, the Town Council must approve any incentive in this Section 2. If the aggregate of the fees, costs of Town-constructed improvements and sales or sales tax rebate is less than $50,000, unless the business is engaged in retail activities, the Town Manager may approve any incentive in this Section 2. All retail development tax incentive agreements must be approved by the Town Council, regardless of the amount of the incentive, in accordance with this Section 8. Section 4. Criteria A. The Town shall not grant the incentives authorized in Section 2 without finding the potential recipient meets at least one of the following: 1. The rebating of the fees, expenditure of the funds or rebate of Town sales tax revenues will assist in the creation or retention of jobs in the Town with the average hourly wage for non-exempt positions (pursuant to the FLSA) of at least 75% higher than the federal minimum hourly wage and wherein the recipient pays at least 25% of the average hourly wage for non-exempt positions in benefits; and 2. New eligible industrial and commercial projects must expend a minimum of One Million, Five Hundred Thousand dollars ($1,500,000.00) in equipment, machinery, land, and building improvements as its initial investment at a single location; or expansions of existing eligible industrial and commercial projects must expend a minimum of Seven Hundred, Fifty Thousand dollars ($750,000.00) in equipment, machinery, land, and building improvements as its expansion investment at a single location ;or 3. The recipient's operation is located entirely within the boundaries of the Downtown Redevelopment District, does not adversely impact the historic ambiance of the District, and promotes the economic vitality of the District. B. The Town may also consider the following factors in determining whether the potential recipient should be granted incentives: 1. Economic development will be furthered by rebating the fees, expenditure of funds or rebate of Town sales tax revenues. 2. The recipient's operation will otherwise improve or enhance the economic welfare of the inhabitants of the Town. 3. The recipient's operation will not disproportionately expend natural resources or public infrastructure and services, such as transportation infrastructure or public safety services. 4. The benefits the Town will receive from the retail, commercial, or industrialJ ro'ect p outweigh the economic costs to the Town, as demonstrated through the Town's fiscal impact analysis model. Economic Development Incentive Policy Page 4 of 7 5. The potential recipients' use of and availability of other funds and rebates from the Town or other sources including other governmental entities. 6. The project furthers the goals of the Town as defined in the Focused Future Action Plan and conforms to the Florence General Plan. Section 5. Agreement Required In order to utilize the incentives provided in Section 2, the recipient and the Town must enter into an enforceable agreement, including a development agreement pursuant to A.R.S. 9-500.05, as to the terms and conditions of the development and such other provisions as may be requested by the Town. The agreement must be consistent with the requirements of this policy and shall further identify the rights and obligations of the parties. The Town may request that the agreement be secured or collateralized such that the recipient's obligations are reasonably assured. Not withstanding A.R.S. 19-142 § B, a decision by the Town Council involving a development agreement shall not be enacted as an emergency measure and that decision is not effective for at least thirty days after final approval of the expenditure or the development agreement. Section 6. Developer Obligations The recipient, in order to receive, or continue receiving, incentives or enhancements, shall: A. Provide information, including capital investment and employment projections, to enable the Town to prepare a fiscal impact analysis; B. Begin construction of the improvements within twelve months of the date of the offer by the Town or twelve months from the effective date of the development agreement, if there is one; C. Complete construction, remodeling or improvement within twenty-four months, or the time period specified in the development agreement, of the date of the offer or effective date of any development agreement with the Town; D. Upon purchase of the parcel or parcels for the economic development project, the owner/developer agrees to commence construction of the improvements no later than ninety (90) days after issuance by Town of a building permit. E. Owner/developer agrees to comply with such zoning, building and planning requirements as are applicable to construction of said improvements, including cooperating with the Town in connection with site plan approvals and the obtaining of such other permits as are required in connection with the development of the land and construction and occupancy of the improvements. In addition, owner/developer agrees to provide Town with information necessary for the Town to complete its fiscal impact analysis model. Such information shall not include proprietary or certain financial information that, in the reasonable opinion of the owner/developer, could be used to owner/developer's competitive disadvantage by market competitors. Economic Development Incentive Policy Page 5 of 7 F. Unless specified in the development agreement, Owner/developer agrees to be wholly responsible for paying town impact fees, development fees, plan review fees, permit fees, inspection fees, connection fees, and fees required by the Town for studies, reports and other project-related analyses. G. Owner/developer shall make every reasonable effort to have improvements satisfactorily completed, to obtain a Certificate of Occupancy, and to have the economic development project open for business on or before a certain date which shall be identified in the development agreement. H. On each anniversary date of the issuance of the certificate of occupancy through the compliance period, the recipient shall provide to the Town Manager an informational update, including capital investment and employment projections, which demonstrates the recipient's compliance with its obligations under its agreement with the Town. Section 7. Reports to the Council A. The Town Manager shall report to the Council any rebate of fees, tax revenues or expenditure of public funds in which the aggregate of the expenditure or rebate is less than $50,000.00. The report will be provided to Council within 30 days of the recipient's acceptance and shall include, but is not limited to: 1. Company name and description. 2. Amount of capital investment by the company for construction, remodeling or improvements. 3. Number of additional jobs added or created by the company. 4. Purpose of the Town offering enhancements. 5. Preliminary fiscal impact analysis prior to business operation. B. The Town Manager shall within 30 days of his receipt submit to the Town Council the reports received from recipients in compliance with Section 6. C. Pursuant to A.R.S. 9-500.11 a status report is presented in a public meeting every two years for the duration of the agreement that identifies the revenues and expenses associated with the tax incentive. Section 8. Retail Development Tax Incentive Agreement Before the Town enters into a retail development tax incentive agreement with a retail business facility,the following conditions must be met: A. The retail business facility must locate within an area designated as a redevelopment project pursuant to A.R.S 36-1471 et seq. Economic Development Incentive Policy Page 6 of 7 1. If the retail business is not located in an area designated as a redevelopment project the tax incentives are not permitted unless the business meets at least one of the following conditions: i. The incentive is for the purpose of preserving historic structures. ii. The incentive is for the clean up remediation of a Brownfield site under Title 49 Chapter 2 Article 1.1 or the site is designated as a superfund site by the US Environmental Protection Agency. iii. An incentive that consists of reimbursement for public infrastructure, that is accepted and controlled by the Town upon completion, or the fair market value of real property necessary for the public infrastructure. iv. The incentive is available to all new and existing retail business facilities in the town. B. A fiscal impact analysis must be conducted by an independent third party. The person or business entity receiving retail development tax incentive shall not finance the fiscal impact analysis nor have any input into the selection of the independent third party. The fiscal analysis must show that the proposed tax incentive is anticipated to raise more revenue for the Town than the amount of the incentive within the duration of the agreement. C. The Town shall adopt a notice of intent to enter into a retail development tax incentive agreement at least fourteen days before approving a retail development tax incentive agreement. D. The Town Council, by a two-thirds vote without the use of a consent agenda, shall conclude that: 1. The proposed tax incentive is anticipated to raise more revenue than the amount of the incentive within the duration of the agreement. 2. In the absence of a tax incentive, the retail business facility or similar retail business facility would not locate in the Town in the same time, place or manner. This condition is optional if the tax incentive is given to a business or entity in an area that is designated by the Town as a redevelopment project as defined in A.R.S. 36-1471. E. The Town Council shall, by a two-thirds vote without the use of a consent agenda, approve the retail development tax incentive agreement. Economic Development Incentive Policy Page 7 of 7 Fountain Hills , AZ TOWN OF FOUNTAIN HILLS Economic Development Procedure NUMBER: ED-6 SUBJECT: Economic Development Incentive Guidelines PURPOSE: To establish a set of incentive guiding principals in an effort to develop and expand the local economy by promoting and encouraging development and redevelopment projects that significantly enhance the Town's economic base, and diversify and expand job opportunities or by promoting and encouraging projects that create substantial increase in revenue for the Town even after comparing the cost of increasing the demand on Town services or infrastructure. ACTION: 1. The Economic Development Specialist shall design incentives to encourage high quality retail, office,technology, business and light industrial concerns to locate, remain, and expand in the Town of Fountain Hills. The following are"guiding principles" regarding when use of incentives is appropriate: • Incentives are to be used very judiciously—only for those projects that provide significant, quantifiable, financial-benefit to the community and demonstrate a need and request a need for assistance. • Incentives shall only be considered after a formal request has been made to the Town including the submitting of documentation demonstrating a net positive revenue for the Town. No incentives shall be offered until a request has first been made. • Incentives are generally paid out of future tax revenues derived from the project itself, not paid upfront. • The incentives are performance based—that is,the Town shares back the revenues derived from the project. If the project does not generate adequate revenues within a certain period of time, it does not receive the full payment. • There is a total dollar cap and a time cap on all incentive proposals. • The project must have demonstrated net positive revenues for the Town. A study shall be completed comparing the increase in the Town's revenue versus the increase in the Town's service cost. The ratio should at minimum be a 4:1 ratio to the good. • The Town's assistance is tied to a direct public benefit, such as the provision of new public infrastructure. • If the project is a redevelopment project,the building shall be at least 60% vacant for a minimum of 2 years. • A minimum of 100 jobs shall be created from the business or total project. • A minimum of 50,000 square feet shall be added or rehabilitated. E:\Griego\nydocuments\pol icy\ED-6\3/27/06 Other incentives that may be used by the Town of Fountain Hills can be non-financial in nature. The most significant is the Town's ability to provide an expedited review and permitting process; for businesses. 2. In furtherance of these objectives, the Town of Fountain Hills will, on a case-by-case basis, consider providing economic incentives to applicants in accordance with these guidelines. Nothing in this document is intended to imply or suggest that the Town of Fountain Hills is under any obligation to provide economic incentives to any project. All projects shall be considered on a case-by-case basis. The decision to approve or deny economic incentives shall be at the discretion of the Town Council through a redevelopment agreement signed by the developer before being placed on an agenda. Each applicant granted economic incentives under these guidelines must enter into an agreement with the Town of Fountain Hills containing all terms required by these guidelines and by state law to protect the public interest of receiving a public benefit in exchange for public funds, assets and services invested to stimulate economic development in Fountain Hills. 3. Initial incentive discussions will only begin after approval of the Town Manager. Effective Date: September 1, 2006 Revocation: None Authorized by: Tim Pickering, Town Manager E:\Griego\mydocuments\policy\ED-6\3/27/06 Kingman , AZ CITY OF KINGMAN ECONOMIC DEVELOPMENT INCENTIVE POLICY GUIDELINES GOAL: To provide the City Of Kingman Common Council a set of guidelines that assist in the retention of existing businasses and the attraction of new or expanding targeted businesses to the City Of Kingman resulting in the divemification of the existing tax base and the creation of employment opportunities. POLICIES In certain,cases the City may con:sider using some form of incerItives in order to attract or retain targeted businesses. These incentives will only be used when the City satisfies itself that the addition of the new business or retention arbdior expansion of an existing business would have a significant,positive fiscal impact on the City of Kingman economy. The need for diversification of the local economy is:highly desirable, This policy places a priority emphasis on new and existing businesses that generate significant sales tax revenues,meaningful employment opportunities and economic sustainability. In all instances wherein an incentive and/or inducement is considered the City of Kingman MUST employ an independent third party qualified to verify: I That the proposed tax incentive is anticipated to raise more revenue that the amount of the incentive within the duration of the agreement;and 2.That in the absence of a tax incentive,the retail business facility or similar retail business facility,nor currently kx:ated within the City limits nor under consideration to he annexed into the City,would not locate in the City in the same time,place or manner.(ARS Section 9-500.11). The following general provisions shall be considered prior to offering incentives, 1. A high'priority should be placed on the businesses-tArgeted"in the City of Kingman. Economic Development Strategic Plan. 2. The project will have a substantial positive economic impact on the corruntmityh i.e.;the number ofjobs created or the sales tax created by the project in the long-tem will offset the short-term costs offered by incentives. Additionally,the project or business will be of such size or consequence to produce significant employment or sales in related sectors. I Incentives should not continue for more than a ten(10)year period,including multi. phased projects,i.e:,the ten year perkxl is inclusive from the first year of the first phase, regardless of planned future phases.,or from any"milestone date or event"as determined by the City of Kingman Council.The project developer may request an extension of the ten year thine limit or milestone date or event to the City Council,This request must be based solely on some event or occurrence that is/was"beyond Control of the Developer/Owner" , 4 An emphasis should be placed on firms that provide diversification(within targeted industrial or commercial sectors)to the City's economy. 5. The City will not buy land or existing buildings or construct buildings for purely private objectives. The City's position should be to offer incentives that have a relationship to public benefit hnprovernents such as streets,water lines,traffic signals,storm drainage, Policing struCtulTs.parks and open space,and similar publicly assessed improvements are examples of puhlic.private rmanced incentives. Acquisition of property and construction of buildings,if necessary,must be related to a public purposee 6. The dollar amount of the incentive offered shall not exceed the cost of the project considered nor shall the incentive value be more than 50%of the new revenues that the project could reasonably expect to return in benefits to the City within a ten year period as defined in paragraph three(3)above, 7. Private dollars shalt be utilized for all upfront project costs_ 3. In certain imtanees incentives may be offered in conjunction with financial goals and annexation activities which are viewed as financially arid strategically important to the City. 9_ The intangible or unmeasurable benefits of a business to a community,such as the location of a headquarters facility,enhancement of attractiveness to other similar businesses or suppliers,or other similar iinage-related items are also very important and should be considered along with other factors when making decisions on int-votive& 10, Generally Retail projects which qualify should generate significant sales tax revenues similar to projects nomtally identified at a cotnnuinity or regional shopping center level. or if a single business,show a clear positive fmancial benefit to the City ii. The use of retail sales tax sharing shall be used as a''pass-thru"tool to erlcourage earlier cstablishment of high end stores and/or high revenue generating retail operations in any single project .12, New Retail development should have an emphasis on meeting a need not currently being filled in the community,or providing a.higher level of seniee/goods/products than presently available,or providing similar services in tin area not currently being sawed. 13. Final authority for any approval of the use of an incentive and/or inducement rests solely with the City of Kingman Council. 14. Each action is separate and independent from all other actions associated with the approval of the use of an incentive and/or inducement, 15. The use of incentives must be linked to performance criteria.By policy the City of Kingman will not expend public funds prior to development of any commercial project, 16. Non-revenue sharing incentives which may be considered would include: a. Reduction of impact fees; b, Reduction of building permit fees; c. Reduction of water mtnection fees;and d, Extension of the Project Team approach that hats been successfully used for larger development projects to any project identified by the Council. The above suggested incentives will need to be addressed from a legal and fairness consideration due to the moult of the establishrnent of impact fees and bonding requirements where applicable.Staff will include an analysis with each request for a consideration by an applicant to the Mayor and Council ,, . .„ „ Sate L � sa hil ����cArizona . . Forty.. yin Legislature- cond Regular: ri .4 , R ,r6:'� xr e'8 t 'X`, KvU, G r :. � c_ F- s i�w •.."eF`,rt ���,\�\d . °t� ,� e *ax 3,tr x pfdy ' ,.,'�ra•e ,"- - �..�4 1.4 :z : "Y�f:t4 z 3 w 1 1 .or 'i'!P •- ... i�M v`«ac�,t, a 4 - y�: cb't'.�i:a t3 <t• 's�'• �' .,. ...;,.�: ,,;, }.� _ e�.�'� II"w�'�x#k vim'�f,'2�=-'` C'�� t x t}F,X� �„\������� xe,� F i_ ����ut x s�' �fi��P�ixx;.� �x t, 'f.•.t. !- + .i'.^t�.�hey•� 3.� �.i'7y` 5 2` ^,p' v� ,. ;ts �a- • t,, .'t .1 ARS'trite PAq PREpi x nditures.for eCOOOMIC di'Netoprment; rcqui r r 5, d 'tit t1 (L05,Ch.200,sec..1.) A.In addition to any other powers granted to a city or tom,the governing body of a c or town may appropriate and spend public monies for and in witviection with comic development at B.To fund economic d+ opt nrt activities under this section,a city or town subject to the requirements section 9- 500-06 shall not imixisle a new qr tax on a single specific industry or type of b id. • Notw t t 19-142,subsection 8,a decision by the governing y involving an expenditure pursuant this SeCtiOri shall Mt be enacted as an ememency measure and that decision is not effective for at Itt.at thirty days after final a the expenditure. • Bra entering into a rail development tax incentive 'eernen t,a city or town shall make a finding by a simple majority vote of governingbody without the use of consent calendar that includes both of the following.; I.That the proposed tax incentive is anticipated to raise more revenue than the amount of the incentive within the dura of the agreement, 2.That 14 the absence of a tax incentive,the retail business facility or similar retail business facility would not locate in the city or town in the same time,place or manner. F.A city or tow located in or within minty-five Irides the exterior boundary(-.4 a metropolitan statistical area having a population of more than two million Persons shall make a finding pursuant to subsection D this section, by a'two-thirds vote of the governing body" F.A city or town shall not enter into a retail tax incentive agreement if the proposed tax inceptive raises less revenue than the amount of the incentive. G.A city or town shall present a status report of the revenues and expenses associated with the tax incentive everyr two years for the duration of the agreement in a public meeting. H.The finding made pursuant to Subsection O, paragraph I of this section shad'be verified by an independent third party befone the city or town enters into the retail development agreement, � t<� L The adoptiori of the retail development tax incentive reem t shall be Vowed by a simpie maiorty simplevote of the governing *mut the use of consent tater.For a city or town located in or within twenty-five miles of the exterior bouna rnetropolltan statishcal art$a vipopulation of more than two millionpersons,the adoption of a retail development tax incentive shall be approved by an afxnative vote of at leasttwo-thirds of the governing body bout the use of consent calendar. I.A.person or business receivingthe ail development tax incentive agreement Oval not finance the independent third party verification of the findings or have input into the selection of the independ+ tthird party verifying a findings. K.A city or town shall adopt a notice of Intent to enber into a retail de pment tax incentive agreement at lea5t fourteen days beforeapproving a retail dwelopment tax incentive agreement, L Subsection 0 of this section does not appiy to tax In byes given to a business entity in an area that is des4nated by a city or town as a redevelopment project as defined in section 36-1471. M.For the purposes of this section: 1."Economic development activities"means any project,assistance,undertaking,program or study,whether within or outside the boundaries of the city or town, inctuding acquisition, improvement,redevelopment,leasing or corwayance of Improved or unimproved real or personal property or other activity,that the governing body of the city or town has found and determined will assist in the creation or retention ot jioos or will otherwise Improve or enhance the econornk welfare of the inhabitants of the city or town. 2. "Expenditure"includes any waiver,exemption,deduction,credit,rebate,discount,deferral or other abatement or reduction of the normal municipal tax liability that otherwise applies to similar existing business entities and properties in that city or town,however denominated,computed or applied,and that is generally understood as an inducement to locate a business facility or other operation in the city or tovm, 3.'Metropolitan statistical area'means a geographical area consisting of cities,towns and other populated areas defined for federal statistical and Census purposes by the United States office of management and budget with technical assistance from the United States bureau of the census. 4, "Retail*means the sale of tangible personal property,except the sale of tangible personal property to a person who is engaged in the business of selling Skgt)property, 5.*Retail development activitiesmeans those economic development activities that involve the acquisition,improvement. Watling or conveyance of improved or unimproved real or personal property or other activity to facilitAte the sale of goods at retail, including the sale of automobiles,or to facilitate other activities*including theater and restaurant development, that generate revenues that are subject to municipal transaction privilege taxation, 6. "Retail development tax incentive agreement means an agreement between a city or town and a person engaged in or planning to engage in retail development activities within that city or town in which the city or town agrees to pay,refund, credit,rebate or otherwise provide to that person all or a portion of the sales,use or transaction privilege taxes payable to that city or town in connection with the construction,development or operation of the retail development activities, Prescott , AZ HIGHLIGHTS OF CITY OF PRESCOTT INCENTIVES POLICY Prescott Economic Development mission: To lead in building a stronger and more diversified economy by promoting increased public/private sector collaboration delivering business development initiatives focused on new investment and quality job growth, enhancing the competitiveness of Prescott's business climate, and driving regional initiatives. Targeted Industries • Aviation-related industries • Environmental technology • Biosciences • Health care • Business and financial services • Precision manufacturing • Education • Research and development • Electronics; software/information • The after-market automobile technology industry • Entrepreneurial/manufacturing Targeted Development Criteria • Business attraction projects that add at least 20 quality jobs in the targeted industries mentioned above. A quality job is defined as a job that pays 25 percent above the prevailing median wage in Yavapai County as defined by the Arizona Department of Economic Security and the employer offers full employee benefits, including employer-paid medical benefits, vacation and sick pay. • Business attraction projects that create new taxable sales of at least$10 million and/or add quality jobs and make a sizeable capital investment. • Business attraction projects that bring a unique and needed product or service to the City of Prescott which creates jobs and generates significant sales tax revenues. • Business retention and/or expansion projects that represent at least$1 million in capital investment in the community and add at least 10 quality jobs. • Redevelopment projects that create new jobs and/or new sales tax revenues, increase property valuations, or improve the surrounding areas by removing blight/slum conditions. Projects that include the renovation of shopping centers at least 20 years old could qualify for public investment. • Downtown redevelopment projects or infill projects that enhance downtown as a center of commerce in Yavapai County. • Recreation or tourism development projects that add needed recreational amenities for both the resident and the visitor. All targeted development priorities will be evaluated on an individual basis by the Economic Development Division and the City Manager's office. Companies considering locating within the city's Enterprise Zone may be eligible for additional local incentives. Examples of Incentives Available • Public participation in the cost of public infrastructure improvements necessary for the project, including, but not limited to water and sewer extensions or upgrades, streets, including traffic signals, and drainage improvements. • Public participation in facade improvements, landscaping, lighting etc. in redevelopment projects. • Payments toward project development costs based upon the sales tax revenues generated by the project. • Public participation in the payment of certain fees and permits. • Bond financing by the Industrial Development Authority. • Streamlined permitting process and site location assistance. • Marketing assistance. • Assistance with state and federal grant and loan programs. • Other assistance that may be appropriate on a project-by-project basis. Additional incentives will be considered if a company brings or creates jobs in which its average wage is double the average Yavapai County wage as defined by the Arizona Department of Economic Security. • The return on investment (ROI) in any retail project must be reasonable and a seven- year break-even point from the time reimbursement payments begin will be used as a guide during the staff evaluation. • If an incentive includes payments based upon a formula that includes revenue generated by the project, the 1-percent road and open space sales tax rate will not be used unless the project is a major sales tax generator and the reimbursement is used for road construction purposes. • If cash grants are involved as an incentive, such grants will not exceed$150,000 unless justifications are made that include the creation or importation of quality, higher-than-average paying jobs. All potential cash grants will be evaluated by the Economic Development Division and the City Manager's Office. Prescott Valley , AZ ' r TOWN OF PRESCOTT VALLEY REQUEST FOR COUNCIL ACTION Date: June 30, 2005 SUBJECT: Agreement with Lockheed Martin to locate Flight Service Facility in Prescott Valley SUBMITTING DEPARTMENT: Management PREPARED BY: Greg Fister,Economic Development Manager AGENDA LOCATION: Comments/Communications❑,Consent D Work/StudyO, New Business IZ,Public Hearing E Second Reading❑ ATTACHMENTS: Draft Employment Agreement SUMMARY/BACKGROUND: Lockheed Martin was awarded a federal contract on February 1, 2005, which included consolidating 58 Automated Fight Service Station (AFSS) sites across the • country into 20 facilities, including three sites designated as hubs—Fort Worth, Texas; Leesburg, Virginia and Prescott, Arizona. Initially, because of a lack of space at the current AFSS facility in Prescott, the Lockheed Martin staff began searching for a facility outside the quad-city area (including the Phoenix area). With the Prescott Valley Economic Development Foundation taking the lead and working hard to retain and attract these high-paying jobs (and after discussions with Town staff)) Lockheed Martin located a building in Prescott Valley that fits its needs and made the decision to locate one of three national hubs to Prescott Valley. At peak operation, the 50,000 square-foot facility on Valley Road is expected to employ about 300 persons and will include a training facility to be used by Lockheed Martin employees temporarily assigned here to learn the operations of the new computer systems. Town staff believes the attraction of jobs of this caliber warrants an Agreement with'Lockheed Martin whereby the Town will make an incentive payment tied to the number and quality of jobs located at the new Prescott Valley facility. Both the Prescott Valley General Plan 2020 and Focus Future II encourage efforts to attract higher-paying jobs to the community. In pursuit of those goals, staff has negotiated the attached draft Employment Agreement with Lockheed Martin with the following highlights: > the Town will pay a performance-based incentive of$300 per qualified full-time job per year with a cap of$1,500 per job during the term of the Agreement. A qualified job is one that offers employee and family health insurance and base pay exceeding by 20%the average Yavapai County wage as determined by. the Arizona Department of Economic Security, Research Division. The most current information from DES pegs the average County wage at $14.59 per hour. A 20% increase over that average would result in an hourly wage of$17.50 per hour, or just short of$36,500 annually. 1 ➢ Lockheed Martin will locate its regional center in Prescott Valley and provide at least 200 full-time equivalent jobs annually over the term of the Agreement. ➢ The Agreement runs five years. Lockheed Martin employs about 130,000 people worldwide and reported sales of$35.5 billion in 2004. OPTIONS ANALYSIS: The Town Council may approve the Employment Agreement as drafted, suggest modifications prior to approval,or decline to approve the Agreement. ACTION OPTION: Motion to approve the Employment Agreement with Lockheed Martin, OR Motion not to approve the Employment Agreement. RECOMMENDATION: Because of the tremendous economic impact the importation of these new higher-than-average paying jobs will have on the entire quad-cities area, Town staff recommends approval of this Employment Agreement with Lockheed Martin. FISCAL ANALYSIS: If 300 qualified jobs are operating out of the Prescott Valley facility from the first day of operation (unlikely), the Town of Prescott Valley's maximum financial exposure would be $90,000 for five years or$450,000. In return,the quad-city area retains the positions currently being held by FAA employees at the Prescott airport and many more will be added. This facility's financial impact in the quad-cities is estimated to be $35 million to $40 million a year at full operations. The training center alone is estimated to have an economic impact of more than$1 million annually. REVIEWED BY: Management Services Director 4.. 'own Clerk I ALL,i .' / _ .,i Town Attorney Town Manager ..-tAA.A.,v),-Th,"4-41,,A44 COUNCIL ACTION: ❑ Approved ❑Denied ❑Tabled/Deferred D Assigned to 2 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into this 30th day of June, 2005, by and between Lockheed Martin Corporation, a corporation of the State of Maryland (the "Employer"), and the Town of Prescott Valley, a municipal corporation of Arizona(the"Town"). RECITALS A. ARS §9-500.05 authorizes Arizona cities and towns to enter into development agreements with property owners regarding (among other things) dedication of land for public purposes, phasing of development, and financing of public infrastructure and subsequent reimbursements over time. B. By Resolution No. 1044 (October 4, 2001), the Town and the Prescott Valley Water District (a community facilities district of Arizona, the "District") entered into a development agreement with Prescott Valley Commercial Development Group, L.L.C. (a limited liability company of Arizona formed on May 23, 2001 to develop commercial/industrial buildings within the Town, the "Group") for the Group to construct one or more commercial/industrial buildings on a parcel of land located within the Big Sky Industrial Park (the "Property", being more fully described in Exhibit "A" attached hereto and expressly made a part hereof) and for the Town and the District to provide economic incentives to the Group with respect to the up-front governmental costs of developing the Property (i.e. to pay the cost for certain off-site improvements that would otherwise be the responsibility of the Group, delay the final application of certain Town and District fees and charges, and cap those fees and charges). C. The Town has an interest in the Group finding an occupant for the Property which will provide new employment opportunities for Town residents. D. The Town's General Plan 2020 notes in Chapter 9 "Economic Development"that "the limited data available indicates that wages in Prescott Valley are considerably lower than those in Arizona" and that "efforts must focus on attracting higher paying employers" (§9.3 "Looking Towards 2020"), and includes as a Guiding Principle that the Town should "promote an economically diverse community, committed to raising the standard of living for its citizens through enhancing the quality of life for the community"(ED-A). E. Policy ED-A1.1 within Goal ED-Al of the General Plan directs the Town to "continue to demonstrate strong leadership in attracting new industries". F. Goal ED-A3 of the General Plan encourages the Town to "foster a strong and diverse economy that provides a full range of employment and economic choices" and, within that Goal, Policy ED-A3.1 directs the Town to "plan for additional industrial, commercial and office uses to meet the needs of the population and to complement the character of Prescott Valley", Policy ED-A3.2 commits the Town to "encourage investment in the development...of urban land and buildings for employment...opportunities", Policy ED-A3.4 commits the Town 1 • to "encourage thegrowth or relocation of industries that generate local tax and employment g • "develop ' tin an economic advantages", and Policy ED-A3.6 encourages the Town to and maintain development strategyplan for long- and short-range marketing efforts focusing on the creation P and expansion of diversified employment opportunities G. Policy ED-A4.1 within Goal ED-A4 of the General Plan encourages the Town to "promote business, economic growth, formation of capital and the creation and selection ofjobs in designated commercial, industrial or employment areas". H. Goal ED-A5 of the General Plan directs the Town to "position Prescott Valley as a leading technology industry center in rural Arizona". I: Within Goal ED-A7 of the General Plan; Policy ED-A7.1 commits the Town to "promote andpursue industries and businesses that are environmentally safe", and Policy.- comparable industries to locate ED- A7.2 directs the Town to encourage...clean, non-polluting and c p in the Town". J. The Employer has indicated an interest in locating within Arizona and Prescott Valley a regional center and national training center which would provide .approximately two g hundred(200) new full-time equivalent higher-paying jobs relating to new technology. K. The Arizona Department of Commerce has offered the Employer certain training grants and tax credits (related to an enterprise zone) to encourage the Employer to locate in Arizona. L. The TownEmployer desires now to encourage the Em to locate its regional center and national training center on the Property. §9-500.11 M. ARS authorizes the governing bodies of Arizona cities and towns to appropriate and s end public monies for and in connection with any project, assistance, P undertaking, program or study, including acquisition, improvement, leasing or conveyance of �' real orersonal property or other activity, that the governing body has found and determined will P P P Y assist in the creation or retention of jobs or will otherwise improve or.enhance the economic welfare of the inhabitants of the city or town. N. The Town desires to enter this Agreement whereby the Town offers. to the P job aEm to er erformance-based incentive of three hundred dollars .($300.00) per qualified P Y full-time job a uivalent per year with a cap of one thousand five hundred dollars ($1,500.00)per q qualified full-time equivalent during the term to locate its regional center and national training center on the Property. O. The expressly Town Council ex ressl finds and determines that providing this• job performance-based incentive to the Employer to locate its regional center and national training center to the Property will assist in the creation of jobs and will otherwise improve or enhance the economic welfare of the inhabitants of the Town. . • • 2 • P. The Town Council also finds that a public purpose is served by this Agreement and that the public benefit to be obtained from encouraging location of the Employer's regional center and national training center on the Property is not far exceeded by the consideration being paid by the public hereunder, and that this Agreement is otherwise consistent with the health, safety and welfare needs of the community. Q. The Town Council further finds that this Agreement is consistent with the Town's General Plan 2020 pursuant to ARS §9-500.05(B). NOW, THEREFORE,the parties hereto agree as follows: • AGREEMENT • ARTICLE 1. DEFINITIONS The following terms shall have the meanings set forth below whenever used in this Agreement, except where the context clearly indicates otherwise: 1.1. Full-Time Equivalent Job -- any number of employees hired to work a total of forty(40)hours per one-hundred sixty-eight (168) hour period. 1.2. Qualified Job — any employment which offers employee and family health insurance and base pay that exceeds the Yavapai County average by twenty percent (20%). ARTICLE 2. EMPLOYMENT PLAN 2.1. Duration of Agreement. The term of this Agreement shall continue and exist from the date first-above written through September 30, 2010,unless sooner terminated by either party upon twelve(12)months prior written notice to the other party. 2.2. Employment by Employer. The Employer shalllocate its regional center and national training center on the Property and provide at least 200 full-time equivalent jobs annually on the Property over the term of this Agreement: 2.3. Town Economic Incentive. .The Town•shall pay the Employer three hundred dollars ($300.00) for each Qualified Full-Time Equivalent Job provided by the Employer and filled for at least six (6) months each year on the Property during the term of the Agreement. A cap of one thousand five hundred dollars ($1,500.00) shall apply to the Town's payment for each Qualified Full-Time Equivalent Job. Payments shall be made for the prior year from the anniversary date of this Agreement within forty-five (45) days after verifying information received from the Employer as set forth herein-below. 2.4. Failure of Timely Performance. In the event that either party hereto fails to perform any of its obligations which are set forth in or contemplated by this Agreement in a timely manner, and should such failure not otherwise be excused by agreement of the parties or • 3 by the terms of this Agreement, such failure shall be considered to be a breach of this Agreement and the nonbreaching party shall have their respective remedies set forth in Article 6, below. 2.5. Manager's Power to Consent. The Town hereby acknowledges and agrees that any unnecessary delay hereunder would adversely affect the Employer and its performance under this Agreement, and hereby authorizes and empowers the Town Manager to consent to any and all requests of the Employer requiring the consent of the Town hereunder without further action of the Town Council, except for any actions requiring Town Council approval as a matter of law. ARTICLE 3. INDEMNIFICATION 3.1. The Employer agrees to defend, indemnity and hold harmless the Town, its officers, officials and employees ("Indemnified Group") for liability for, from and against claims, damages, losses and expenses of any nature whatsoever (including but not limited to reasonable attorney fees, court costs, the costs of appellate proceedings, and all claim adjusting and handling expense), relating to, arising out of, resulting from or alleged to have resulted from the Employer's acts, errors, mistakes or omissions relating to any action or inaction of the Employer under this Agreement, including but not limited to work or services in the performance of this Agreement by any subcontractor or anyone directly or indirectly employed by or contracting with the Employer or a subcontractor or anyone for whose acts any of them may be liable. 3.2. If any claim, action or proceeding is brought against the Indemnified Group, by reason of any event that is the subject of this Agreement, the Employer (at its sole cost and expense) shall pay, resist or defend such claim or action on behalf of the Indemnified Group by the attorney of the Employer, or if covered by insurance, the Employer's insurer, all of which must be approved by the Town, which approval shall not be unreasonably withheld or delayed. The Town shall cooperate with all reasonable efforts in the handling and defense of such claim. Notwithstanding the foregoing, the Town may engage its own attorney to defend or assist in its defense, and the Employer shall pay the reasonable costs and expenses thereof. 3.3. Any settlement of claims must fully release and discharge the Indemnified Group from any liability for such claims. The release and discharge shall be in writing and shall be subject to approval by the Town, which approval shall not be unreasonably withheld or delayed. If the Employer neglects or refuses to defend any of the Indemnified Group as required by this Agreement, any recovery or judgment against the Indemnified Group for a claim covered by this Agreement shall conclusively establish the Employer's liability to the Indemnified Group in connection with such recovery or judgment. If the Town desires to settle such dispute, the Town shall be entitled to settle such dispute in good faith and the Employer shall be liable for the amount of such settlement, and all expenses in connection with such settlement. 3.4. Insurance provisions set forth in this Agreement are separate and independent from the indemnity provisions of this Agreement and shall not be construed in any way to limit the scope and magnitude of the indemnity provisions of this Agreement. The indemnity provisions of this Agreement shall not be construed in any way to limit the scope and magnitude and applicability of the insurance provisions of this Agreement. 4 3.5. The indemnity provisions of this Agreement shall survive the termination of this Agreement. ARTICLE 4. INSURANCE • 4.1. Without limiting any liabilities or other obligations of the Employer hereunder, the Employer shall, prior to commencing its performances hereunder, secure and continuously carry with insurers authorized to do business in Arizona the following insurance coverages: * Commercial General Liability insurance with a limit of not less than one million dollars ($1,000,000.00) for each occurrence with a two million dollar ($2,000,000.00) Products/Completed Operations Aggregate and a $2,000,000.00 General Aggregate Limit. The policy shall include coverage for: Bodily Injury Broad Form Property Damage Personal Injury Products and Completed Operations Blanket Contractual (including,but not limited to,the liability assumed under the indemnification provisions of this Agreement); Commercial/Business Automobile Liability insurance• with a combined single limit for bodily injury and property damage of not less than $1,000,000.00 each occurrence with respect to the Employer's vehicles, whether owned, hired, or non-owned, assigned to or used in the performance of the work or services contemplated hereunder. Such insurance shall include coverage for loading and off loading hazards. The insurance policies required herein shall be maintained in full force and effect until all work or services contemplated hereunder are satisfactorily completed and formally accepted. Failure to do so may, at the sole discretion of the Town, constitute a material breach of this Agreement. The insurance policies required herein shall be primary insurance, and any insurance or self-insurance maintained by the Town shall not contribute to it. Any failure to comply with the claim reporting provisions of the policies or any breach of any of the insurance policy warranties shall not affect coverage afforded under the policies to protect the Town. The policies shall contain a waiver of transfer rights of recovery(subrogation) against the Town, its officers, officials, employees, agents, successors, and assigns, for any claims arising out of the Employer's work or services contemplated hereunder. The insurance policies may provide coverage which contains deductibles or self-insured retentions. Such deductibles and/or self-insured retentions shall not be applicable with respect to the coverage,provided to the Town under such policies. The Employer shall be solely responsible for deductibles and/or self-insured retention and the Town, at its option, may require the Employer to secure the payment of such deductibles or self-insured retentions by a surety bond or an irrevocable and unconditional letter of credit. The Town reserves the right to request and to receive, within 10 working days, certified copies of any or all of the herein-required insurance policies and/or endorsements. The Town shall not be obligated, however, to review same or to advise the Employer of any deficiencies in such policies and endorsements, and such receipt shall not relieve 5 the Employer from, or be deemed a waiver of, the Town's right to insist on strict fulfillment of the Employer's obligations under this Agreement. The insurance policies required by this Agreement shall name the Town, its officers, officials, employees,agents, successors, and assigns, as Additional Insureds. Prior to commencing the work or services contemplated hereunder, the Employer shall furnish the Town with Certificates of Insurance, or formal endorsements as required by the A eement, issued by the Employer's insurer(s), as evidence that policies providing the required coverages,conditions and limits required by this Agreement are in full force and effect. In the event any insurance policy(ies) required by this Agreement is(are) written on a "claims made" basis, coverage shall extend for two (2)years past completion and acceptance of the Employer's work or services contemplated hereunder, as evidenced by annual Certificates of Insurance. If a policy does expire during the term of this Agreement, a renewal certificate must be sent to the Town fifteen(15)days prior to the expiration date. Insurance evidenced by the Certificates of Insurance shall not expire, be canceled, or be materially changed without 15 days' prior written notice to the Town. ARTICLE 5. SUBAGREEMENTS 5.1. Subordinate Agreements. The Town and,the Employer hereby acknowledge that operation of the regional center and the national training center on the Property may be accomplished by the Employer through a series of sales, leases, joint ventures and/or other agreements and arrangements with other experienced employers, investors and owners of real property. In connection therewith, it is anticipated and contemplated by the parties that such employers, investors or owners may desire to negotiate and enter into separate and subordinate agreements with the Town and/or the Employer with respect to financing, leases, uses, improvements, plan approvals, and other similar matters which may be the subject of separate agreements between such employers, investors and owners and the Town and/or the Employer. The parties hereby agree that any and all agreements entered into with any such employer, investor or owner of any parcels of the Property shall be subordinate in all respects to the terms and conditions of this Agreement and, in the event of any conflict or discrepancy between the provisions of any such agreement and the terms and conditions of this Agreement, this Agreement shall govern and control. ARTICLE 6. MEDIATION AND DEFAULT 6.1. Representatives. To further the cooperation of the parties in implementing this Agreement, the Town and the Employer each shall designate and appoint a representative to act as a liaison between the Town and its various departments and the Employer. The initial representative for the Town (the "Town Representative") shall be the Town Manager and the initial representative for the Employer shall be its project manager, as identified by the Employer from time to time (the "Employer Representative"). The representatives shall be available at 6 • • all reasonable times to discuss and review the performance of the parties to this Agreement and the operation of the regional center and national training center on the Property. 6.2. Mediation. In the event that there is a dispute hereunder which the parties cannot resolve between themselves, the parties agree that there shall be a 45-day moratorium on litigation during.which time the parties agree to attempt to settle the dispute by nonbinding mediation before commencement of litigation. The mediation shall be held under the commercial mediation rules of the American Arbitration Association. The matter in dispute shall be submitted to a mediator mutually selected by the Employer and the Town. In the event that the parties cannot agree upon the selection of a mediator within seven (7) days, then within three (3) days thereafter, the Town and the Employer shall request the presiding judge of the Superior Court in and for the County of Yavapai, State of Arizona, to appoint an independent mediator. The mediator selected shall have at least five (5) years' experience in mediating or arbitrating disputes relating to business development. The cost of any such mediation shall be divided equally between the Town and the Employer. The results of the mediation shall be nonbinding on the parties, and any party shall be free to initiate litigation subsequent to the moratorium. 6.3. Default. Failure or unreasonable. delay by any party to perform any term or provision of this Agreement for a period of ten (10) days after written notice thereof from another party shall constitute a default under this Agreement. If the default is of a nature which is not capable of being cured within 10 days, the cure shall be commenced within such period, and diligently pursued to completion. The notice shall specify the nature of the alleged default and the manner in which the default may be satisfactorily cured. In the event of a default hereunder by any party,the non-defaulting party shall be entitled to all remedies at both law and in equity, including, without limitation, specific performance and the right to perform the obligation(s) of which the defaulting party is in default and to immediately seek reimbursement from the defaulting party of all sums expended in order to cure such default, together with interest on all such sums from the date said sums are expended by the non-defaulting party for the purpose of curing the default to the date such sums are paid in full. ARTICLE 7. CONFLICT OF INTEREST; REPRESENTATIVES NOT INDIVIDUALLY LIABLE 7.1. Conflict of Interest. Pursuant to Arizona law, rules and regulations, no member, official or employee of the Town shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his or her personal interest or the interest of any corporation, partnership or association in which he or she is, directly or indirectly, interested. 7.2. No Personal Liability. No member, official or employee of the Town shall be personally liable to the Employer, or any successor or assignee, (a) in the event of any default or breach by the Town, (b) for any amount which may become due to the Employer or its successor or assign, or(c)pursuant to any obligation of the Town under the terms of this Agreement. 7 • ARTICLE 8. MISCELLANOUS PROVISIONS 8.1. Notices. All notices and communications provided for herein, or given in connection herewith, shall be validly made if in writing and delivered personally or sent by registered or certified United States Postal Service mail, return receipt requested,postage prepaid to: If to the Town: Town of Prescott Valley c/o Town Manager 7501 East Civic Circle Prescott Valley, AZ 86314 If to the Employer: Lockheed Martin Corporation c/o Assistant General Counsel LMC Properties, Inc. 100 S. Charles Street, Suite 1400 Baltimore, Maryland 21201 or to such other addresses as either party may from time to time designate in writing and deliver in a like manner. Any such change of address notice shall be given at least 10 days before the date on which the change is to become effective. Notices given by mail shall be deemed delivered seventy-two (72) hours following deposit in the United States Postal Service in the manner set forth above. 8.2. Waiver. No delay in exercising any right or remedy shall constitute a waiver thereof, and no waiver by the parties of the breach of any provision of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or of any other provision of this Agreement. 8.3. Headings. The descriptive headings of the paragraphs of this Agreement are inserted for convenience only, and shall not control or affect the meaning or construction of any of the provisions of the Agreement. • 8.4. Authority. The undersigned represent to each other that they have full power and authority to enter into this Agreement, and that all necessary actions have been taken to give full force and effect to this Agreement. The Employer represents and warrants that it is duly formed and validly existing under the laws of the State of Maryland and that it is duly qualified to do business in the State of Arizona and is in good standing under applicable state laws. The Employer and the Town warrant to each other that the individuals executing this Agreement on behalf of their respective parties are authorized and empowered to bind the party on whose behalf each individual is signing. The Employer represents to the Town that by entering into this Agreement, the Employer has bound its interest in the Property and all persons and entities having any legal or equitable interest therein to the terms of the Agreement. 8.5. Entire Agreement. This Agreement, including the following exhibits, constitutes the entire agreement between the parties. This provision applies only to the entirety of this 8 Agreement only; additional and separate agreements with the Town may apply to the Property, and this provision has no effect on them. Exhibit A Legal Description of Property Exhibit B Letter dated May 12, 2005 from Town to Employer 8.6. Amendment of the Agreement. This Agreement may be amended, in whole or in part only with the mutual written consent of the parties to this Agreement or by their successors in interest or assigns. The Town shall record the amendment or cancellation in the official records of the Yavapai County Recorder. 8.7. Severability. If any other provision of the Agreement is declared void or unenforceable, such provision shall be severed from this Agreement, which shall otherwise remain in full force and effect. 8.8. Governing Law. The laws of the State of Arizona shall govern the interpretation and enforcement of this Agreement. The parties agree that venue for any action commenced in connection with this Agreement shall be proper only in a court of competent jurisdiction located in Yavapai County, Arizona, and the parties hereby waive any right to object to such venue. 8.9. Recordation of Agreement and Subsequent Amendment Cancellation. This Agreement, and any amendment or cancellation of it shall be recorded in the official records of the Yavapai County Recorder no later than 10 days after the Town and the Employer execute such agreement, amendment, or cancellation, as required by A.R.S. § 9-500.05. 8.10. Attorneys' Fees and Costs. If either party brings a legal action either because of a breach of this Agreement or to enforce a provision of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees and court costs. 8.11. Notice of Conveyance or Assignment. The Employer shall give notice to the Town of any sale of the Property at least 10 days prior to the effective date of the sale. 8.12. No Third-Party Beneficiaries. There are no third-party beneficiaries to this Agreement, and no person or entity not a party hereto shall have any right or cause of action hereunder. 8.13. No Agency Created. Nothing contained in this Agreement shall create any partnership,joint venture, or agency relationship between the parties. 8.14. Non-Liability of Town Officials and Employees. Except for mandamus and other special actions, no member, official or employee of the Town shall be personally liable to the Employer, or any successor in interest, in the event of any default or breach by the Town or for any amount that may become due to the Employer or successor, or under any obligation under the terms of this Agreement. 9 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. THE TOWN OF PRESCOTT VALLEY, a LOCKHEED MARTIN CORPORATION, a municipal corporation of Arizona corporation of the State of Maryland By: By: Harvey C. Skoog, Mayor Its: ATTEST: By: Diane Russell,Town Clerk APPROVED AS TO FORM: Ivan Legler,Town Attorney 1 10 • STATE OF ARIZONA ) • ) ss. County of ) The foregoing instrument was acknowledged before me this day of 2005, by Harvey C. Skoog, Mayor of the Town of Prescott Valley, Arizona, a municipal corporation of Arizona. Notary Public My Commission Expires: STATE OF ) )ss. County of ) The foregoing instrument was acknowledged before me this _ day of 2005, by , on behalf of Lockheed Martin Corporation, a corporation of the State of Maryland. Notary Public My Commission Expires: 11 • EXHIBIT"A" Site Plan • • • 12 T Ulkla mime/ NMId 3115 13/: C VNOZI!!V'A311VA 11O0S3dd 'MO A311VA 1813 "' 1 I rA 10 (1. 3SVHd Q r "4"1 "et, :111:1 NUVd 3IVUOd000 A311VA 110OS3dd E*z ::?'>at / , / le / / g � 01 , :79 it , / . . ci! 1 Y• I;; � / '1 ii II e ` — it Al '' 11 111 4 r3 11 ' i ; a . / / • / .,-, . ,, , -,, , \...444k, el . ni2 ,..... . ii �' hull� :� i� 1 ;; ° / / /,;.# 'i\ \Q �d iii / / ,.1.'. IN an ii ri 88 /' / / ! g 1. 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' •, ..:750.1. •E: Civic Circle ,.,• , • • , • i • '.• ;• •:• y, ,• I ,•i'•.1 ; j• .•••_•• ;• , _ .1. ,.1)•1 i.`' ••.:1', 'i' •1' ,•'1••' i' -,1l : _ j J , • ..•1' • . •• ' •1 t 1-''1'•1 1•, , / '_ ' ' . Prescott Va11,ey ' • •,'. Arizona 86314 • May 12 2005 ..• .' • • , • ;•.4'.:•.• •;,•: ,,� ,• ' •.,,,' ., �:'•, .•1 '''; ;•� .•-•••••,.'., :..• , i•:;,•'.....'....... ..,•:•. •'.4 : 'I.''' . i'.2-1-H.• .4'...• .:•'.';.•• , •-; ••: •-••••'`..... - --"'-1.,cil VLD . - , : ......., .. .,.,...,:,. : . , . ,,..., .,.. •:, . ,... . ..,,• .. . • , ....;:,.....::,....:.,....,;.. ,..,... ...... : .:: , :,,,,.... a, , . ,..mAy 1 3 2005 , • Mr.Charles•F••Wilkinson. • • :. , - . , Assist ant•GeneraP oiinsel ...•, , .•::''....r........ •r•. ,1 , ,; : : LEGAL • • LMC•Pro' 'es 111c.,. : ; , .• ', • 1 ,,•• • • 1 .' • ,••''' •' ,. • • • .100- �0/`C'1� (((l///•��,yy1''' %%%���= P'�C' y■' 1• ',..,+`) ■M�.■ ,'••• ,' • •.•'., •••1t .,•1 t' 1 �,: :,'i :••' ':','�1: • , �: ; ;' I •'y•.V, es•'S�,t'Stilie`I-•4Y••\/•': , -•:'''...;•+' .1•'.l••.. • • i. .1 1 i• •1.'.`• ,' •• ( ! • . Baltimore,Maryland"-2.1201'.' . .• , r-• • i.•. • • : 1•• : • , .• ,. 1 ; : j •' , • Dear Mr.. Wilkinson...,' • • - • 1 •1 .: .1' 4' ' '1 r.1 1 1 1 :,_• , j .. •i •, • ', , • • ' • • The: 'se•of'this•letter':is:to;affirm :the.economic•devel • • . • p•.wpo . .. , =1,• . . . � .1.- ',' ', ' ' •'development �ncent�ves�'dLscussed with , ' you; Jeff'Troai;H:and:William::La nb-'on�;Tuesday,•May Inn'IPr.•;•.:-.sotV Valle. .•• We are•v ' •1 =• 1 •'1t. '•i 1:is,-1. 1 1.1 i .•••1•1• ',1,Ii 1;. .. .1..1,; t•.. '•� , • . .,. pleased to,have:f ockheed'Martin.locati•ng'•the.regional center and;yor national,trau�•un•g••center . • • F..4in:,ou .Wmm iiiiitsi. - •,'' , ,'•• • ' , -/,..i.1 l'•'•i•,••.•1.1 1 .1,=•1:1 'i•. •_.a'1' • •, •,:„. 1 • 1 ' I 1 1 • '' • 1 , •_ 111 , :•1 , . ' . i. • .Our:community,values'•�he'.:partnership,of i kheed•Martur.and Prescott Walley•and'we are • confident teach of.your:.new::em loyees'•will:,equally,enjoy o• Prescott,Valley as•a;great,place• •• • ' ' to live,work,.aiid call:ho e. ' .. ' •` • ! .•;•• • • • • , . 1 t• ,' ',1•1 •' ', .1• •.,•, .'1 i• .1 ' 1 1 t ..• -.,..,.1; 1 • , • • As we-:discussed•'our=;local i=" 'uali ob • •• _ ':. ,A '.' s• ,'m ,'.:,bein •iofferixE to' Lockheect.M i . ,• , 1 .: • ' . '• ..'•; • i: " ••, •Vi .,.• i • •1•'• i, •1 11 .i':' '.+ .. i 'Giv a quality jobsiprovider is ajob-performance-based progr8ln.:'•• ' ; 1 i 1 1' '•,/ • i• ,• • .1') A.... • ..1 1••il' ,►1• I '• • ' ,, ' ' 1.,••=•: , .,-' . ,.'1 1 •j. r f . , .., • .1 ' • II1��sAs�� P�■•��!�il- , V _ _• _ 1 ,•1 1 , ''• .•••.1•1 `` / 1 1'• `•1.(, . 1 1) • , 1. Programt e Y• .•1./,, 1' 1' •i•• , •••.-. t. , • ;1 ',♦'• -,'i. ,, 1 „', , • , • 1 I •.• .' ., •' r •''i 1 , '.' •t' ,1, '•a,'••' +'t,,4,`•1 .1 i •,'' i,. 1 ..;• '•' •1•. `;1 ,,• • • • Ir .•',••,.�• • 1 '.. '' 1. •t•, ,,,• •i. •, .,..'1 ,.,, _ .•, •.•',t=1• 1'• 1• 1 1 1. .. , ,•• . , . ';1.�• •Fiillt�time.em to •ee• . •:''. . .••• .1-, •r. , , i!:1•,..+• _'• .'.i�. +i,, ' •i ..-1 . •/. '.� .. .� • . ' . . • . •'•1 ,,•1. 1 .. 1. 1 . • ( 1'.•,,'••• • ,,..'' •t+. • ' •r . ('. 1. 2- I Employer'provide.rhea11h,mnsurance'for employee''.= ',j'.r , ,,:7;'• • • i r..i i 1 J •1 - , • 1' ••'_ 1 1;it' I.1'1.1 •• •I, ;'•t •i _ i:i • ' , •• . , • .1 t' 1.- _ ,' , .• t,'1• it / ••1 , •' i,.1.•P', _. 1 .,1 ': � 1 • _13. . Employee:base pay.-must exceed county:average:by`•'20%,1 .• ' •. ', : , . - I • 1 ......i 1 • - ,'•1 1• •'i ,.1. :f, ,, 1 ..i.,, ',}, ;'''' t•1 •1(. ' 1 = ••,•••• •• ' 1 • ,• . ' 4. •'Employ•ee'.employment location;wittiin•Prescott�:Valley: ' r,'' , ; •1• : • , • • •• ,' •''' r 1 1. ..I,•.:•..•,;,...: .1• '' • 1.1 •' ,.,...,:;...•,•. ,•t,• ..;.•...•..4,••,‘..,..1..'.',,.•. 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Enterprise Zone:tax icredit,pro • ••,.J t • • -. r. • ; , ••; •• . • 1 • • • , These'issues w •ere'•addresse •d•by�Arizon:a:Department of Cpmmerce.,offcials: .•''1. • 1 1•• •11 'I' ' • • • ' Working;wi•th,your,public relatioi.ns,tdep•art•ment•tu•netable:•for•an.'annoui cementrwill tugger our . . • . ' • • scheduling•of this Dev'1, gree - .• ; . . • - • ' e apinent A ', merit�fo�rlt�ie'full•�,Town�Councillrati�icataon. • .�. ♦ is• '.. �• •,•••� You`.,,,ii.ta:kr6,1O.Osiixtg..forWa.r.d:ti4v, : .. , ' Again,.we len�oyed•meet ng'witt�each�of . ' ', . :vyo 1 with yow staff.in'develo••' an.M�".U'•or develo •menta •'•'ement over•the;next•t:fe.. •weeks:•Please•f• eel , . • . • ' • IPPS, ',•' 'development: • . •• • • • •I •/. .. • i ;, . • • -free to contact. :Marks••-at;928--7750032-oitL. i.•Tarl<owski,o•ur:Town.Manager at•928 • ' • ' ' • 759-3101 with.any questions •' .' • _.. '1 . ' • 1' ' ; • • • - • • 111 v1 i ,1 • ,, • l� ,i '�'I ' 1 •J • • / • 1�1• • ,.•. t i •I .1 • ' Re tfull , .•.„ ./- i. 1 I• . •.-: +., i..,.'',i '1 ,: ,1 • •!1'•, t 1'1 . '' 1 i 1' • ,�' ' , ,. ,' 1 t , ..,....:7 1 ., /• 1 .`I , ' .'•.'•'' '•I 1 ', ''t•,-�-- 1 ', 11.1;;' }•!• ; 1 •t 1 1 , _ 1 1 ..• ',• 4....,-4." ‘,-.'..-,....r..'._•.I.v..: •...•'..s•i:•••,.;.:,•..i,,,•;••-•.:.-..,i..,.4.,•.•:..,..,'.,.... Harvey C. ' . t ,,t ,'' ', . , •1 •••• ' ' • y .8k, :g.} • ;' .,i •Mi chael;IF1'annery ; •y1' • • , ': 4. •' V�ce�Mayor t• 1 . . . ',i'f } , ('I '1 '.'. 1•,, 1 • ',•• ,1 ' t •,'• , 1 ', •,' 1' 1•• 1•� •1 ' '•i'1 ' • 1 . , • • • • • • , ,, • • •.r 1,,• ,} t , 1 i ' 1'. ' 1 ,• .( •.' 1 1 ~ , , l ' • • . •• ,rI• •• . 1 , •.•. :• .I • t. • • • • 1• r''I 1 } 1' 1 i I1) ' . • i • .• . s, t 1 r r } I,r•,t .•I•• ,• :I ; 1 f 1 + • , , ' • 1. 1•• . '' 1 '1 ' 1 {.' 1.1!t1• t•• •i ' t • I ..., "'• • , • Queen Creek , AZ Economic Development Investment Program The Queen Creek Economic Development Investment Program is intended to guide Town Staff and Town Council decision-making when evaluating the expenditure of public funds for eligible development projects.. Eligible projects will meet one or more of the following criteria: • Economic Development will be substantially furthered by waiving the fees, expenditure of funds or rebate of sales taxes. • Expand and diversify the economic base of the Town. • Generate revenue for municipal services. • The waiving of fees, expenditure of the funds or rebate of sales taxes will assist in the creation or retention of high wage (above the county average wage) jobs in the Town or will otherwise improve or enhance the economic welfare of the residents of the Town. • Project is within one of the Town's targeted business clusters. • Project is within the Town's established Redevelopment Area. • Contribute to the long-term environmental sustainability of the Town, example LEED certified projects. • Project will produce a unique or competitive economic advantage for the Town • The benefits the Town will receive from the commercial or industrial project outweigh the costs to the Town as demonstrated through the Town's fiscal impact analysis model. The Town of Queen Creek may consider the following project investments subject to a thorough financial analysis: • Waive any or all of the following fees required to be paid in connection with a commercial or industrial project — Planning & Zoning filing fees, engineering review fees, plan check and building permit fees. • Enter into a written agreement whereby the Town shall contribute to the costs of public infrastructure, as determined by the Town Manager, which are required to be constructed in connection with a commercial or industrial project. (financial assistance for curb cuts, driveways in the public right-of-way, water/sewer extensions, drainage improvements) • Initiate the process of applying for federal and state economic development grants, low interest loans and job training programs through partner agencies. • Financing through Improvement Districts or Commercial Facilities Districts. • Expedite plan review. 1 , For projects locating in the Redevelopment Area the Town may consider: • Enter into a written agreement to use available state incentive programs for Redevelopment Areas. • Expedite permit issuance, including commitments for permits at foundation stage. In addition, if a project meets one or more of the above criteria, the Town Manager is authorized to waive fees or expend Town funds for project assistance up to $100,000 for a single project. The Town Manager is authorized to waive any or all of the following fees required to be paid in connection with a commercial or industrial project: plan review fees, inspection fees, water extension costs, sewer connection costs. Enter into a written agreement whereby the Town shall construct or expend Town funds to pay the costs of construction of off-site improvements, as determined by the Manager, which are required to be constructed in connection with a commercial or industrial project, waive or pay all or a portion of water and/or sewer development fees in connection with the construction of a commercial or industrial project or Rebate all or a portion of the sales taxes generated by construction of improvements on the property by the commercial or industrial project. Maricopa , AZ � M Maricopa F.i es • Summaryof State and Local Economic Development Incentives summer 2008 City of Maricopa PA). 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Arizona offers a wide variety of economic incentives to encourage high-wage job growth and capital investment. The Arizona Department of Commerce is the central source of information for Arizona's business incentives, which can be found online at: http://www.azcommerce.com/BusAsst/Incentives/Home.htm Arizona Department of Commerce Job Training Program This is a job-specific, reimbursable grant program that supports the design and delivery of customized training to meet the specific needs of employers, create new jobs and help increase the skill and wage levels of employees in Arizona. This program can provide grant money to your company for training new employees,or to supple- ment training programs for incumbent employees. Under the"Net New Hire"portion of the grant program, businesses can apply for grants that return up to 75%of the costs of training net new employees in jobs that meet wage criteria. The"Incumbent Worker"portion of the grant program will allow for training that upgrades the skills of existing employees.The Incumbent Program can reimburse employers up to a maximum of 5o% of al- lowable training costs.Award amounts may not exceed $1,500,000 for any single employer and may range up to $8,000 per position for rural or small business employers located in enterprise zones. For more info, visit the Job Training Program online. Foreign Trade Zone Program • The program offers the following two primary benefits: 1. Duty-Free Storage: The FTZ is a secured area treated as though legally outside of the U.S. Customs terri- tory where merchandise may be brought duty-free for purposes such as storage, re-packing, display, assem- bly or manufacturing. Imports may be landed and stored quickly without full customs formalities. 2. Property Tax Reduction: Arizona is the only state in the U.S.that has enacted special legislation that pro- vides an 8o%reduction in real and personal property taxes for companies qualifying for FTZ or sub-zone designation. For more information about these incentives,please contact the FTZ office at 602-771-1124 or review the pro- gramonline. Accelerated Depreciation The State of Arizona provides an aggressive accelerated depreciation schedule to encourage new capital invest- ment and reduce a company's personal property tax liability. The Arizona Department of Commerce will work with company personnel to analyze tax liability and identify specific benefits of the accelerated depreciation schedule.Accelerated depreciation is typically applied to the first four years of the property assessment and ac- celerates depreciation by five percentage points per year for four years.After the fourth year,taxable value con- tinues to be determined using Arizona Department of Revenue schedules. The accelerated rate reaches 88% of the scheduled value in year four. Lease Excise Tax The Government Property Lease Excise Tax Program has been established by the State of Arizona and is avail- able to businesses that lease parcels from a municipality rather than own them outright.All real property tax has been waived and replaced with an excise tax that is an established rate per square foot and based upon the type of use. The rate is reduced every ten years by 20%until it reaches the 51st year,when the tax drops to zero. In some redevelopment districts,the excise tax can be abated for the first eight years after the certificate of occu- pancy. If a municipality is a property owner,this creates a huge incentive for a company to occupy the facility,or allows them the cash flow to performimprovements.Any business or entity occupying a facility on property owned by the municipality(the building may be owned by the private entity,but land on which it sits must be leased from a city).The program typically is used to spur development and redevelopment in downtown areas. 2 I' , ..•,..;.:.,: a:..,w'k.R'x.tm,, L&?v".2.,!'�,rt.r..Z✓:-a..nv'..c.k"•','``;x'w+'i[u,'x`:.x!tz>sn\a:.,T3`:x>.r».r.`ci'>,ks.`.,,a.A,,TS w•>x.r,...,.V,:£,.,.`.k....`,.s6t..-..e\,:..l...--,r........a ,�:•::-,ra.,,....,..r.Y. .? ... ... _ : ... 'f::•..: .. ' ,, , � .<. . Ae> 'ys� � } 'L o . � Vis �A ( :tok, ,�' .E TY § ,. .w.trs•. .. %S :, d5n ,zv , � n .xr3 . �* a� ,' 3 ,£ ta�„ � �� M� v �t : y ¢ : 1. ... Rr . - .. ..y , .. b • , -• L k_ z >. 'kf\ Os , n i�S i.L,. T � r �', i , t�_.< c'. :' �5,,': V._ . 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F w � ,:. fii0 " ,:t.'',., tE � � � 'c ?, . 4t� � fir ic FP ‘1;. lb w� � � x � I . . •$ ! @� r x �t � 3 a. � c �w � . r x _.,. z.s ��, L.,,.3a,." +` tY3 zt�txU �hL* x . � ¢ og 2 g r aB 0tm,-.1y � r lt3�: :tdg e� < �� ;p ** A : r Yk '4e y4lLL �x . t , stK' ,t: ♦C 7 Small Business Capital Investment Tax Incentive Program (Angel Investment Program) The main objective of the Angel Investment program is to expand early stage investments in targeted Arizona small businesses.The program accomplishes this goal by providing tax credits to investors who make capital in- vestment in small businesses certified by the Arizona Department of Commerce(Commerce). Income Tax Credit Provisions An investor seeking an income tax credit must document to Commerce the investment was made in ei- ther a qualified rural or bioscience company or any other qualified small business. For a qualified biosci- ence or rural company,the tax credit may total up to 35% of the investment amount over three years; for any other qualified business,the tax credit may total up to 3o%over three years. If the tax credits exceed the investor's income tax liability, any unused tax credit amount may be carried forward for up to three taxable years as long as the investor timely claims the credits with Revenue. Commerce may authorize up to $20 million in tax credits to qualified investors beginning July 1, 2006 through June 30, 2011.The tax credits will be authorized ona first come,first served basis,which is es- tablished by the date and time the investor files an application with Commerce. Research&Development Income Tax Credit Research &Development Income Tax Credit is a state income tax credit for qualified research and development done in Arizona.This includes research conducted at a state university and funded by the company. The amount of the credit is based on the federal regular credit computation method for Arizona qualified re- search expenses and Arizona basic research payments. If the allowable expenses do not exceed $2,500,000 the allowable credit is 20 percent of this amount. If the allowable expenses exceed $2,500,000,the allowable credit amount is $500,000 plus 11 percent of the amount of expenses over $2,500,000, subject to certain limitations. The amount of credit carryover that may b used in any taxable year is limited to the amount by which the tax liability exceeds the current year credit for increased research activities. Enterprise Zone Program (Property Tax Reduction&Income or Premium Tax Credits) Improves the economies of areas in the state with high poverty and/or unemployment rates by encouraging the creation of quality jobs and capital investment. Can provide an approximate 4o-6o%overall savings on the business'property tax bill through a five year reclassification of real and personal property.Qualified manufac- turers and commercial printers located in an Enterprise Zone must meet the following criteria: • minority-owned,woman-owned or small (a small business has loo or fewer full-time employees or gross sales of$4 million or less) • independently owned and operated(not owned more than 5o%by another company unless the ultimate ownership is primarily family-owned or closely held) • and makes an investment in fixed assets at the zone between $500,000, $1 million or $2 million, depending upon the location of the facility. The investment can be aggregated from 1/1/2001 as long as the zone was in place during that time. 4 res \ Tax credits may total up to$3,000 for each net new quality job over three years for a maximum of 200 employ- ees in any given tax year.For more information on qualification requirements,visit http:// www.azcom n.erce.ccom/Bus,asst/Incentives/Enterprise+Zone.htnl • x Vigi.W:,MM:.il4icg,Pt.1..:ig iii;P:11.1e''in:aa I',,.:1.::;,.'.,1111. .'::,:V;Z:i.;:';g'!EF W:',h:.' ,.:16fr,OVI'!.'iM:11;1'1 k' , t State ax Benefits .,,,, ' , . , .2 . ,, ,s ,� ..q , ,r,-1 € °: ?,.•X, 3, x„.i�+... =j iii a ,+ ,+ s cs a'° A .. Commercial Solar Energy Tax Credit Program The primary goal of the Commercial Solar Energy Tax Credit Program is to stimulate the production and use of solar energy in commercial and industrial applications by subsidizing the initial cost of solar energy devices. The program achieves this goal by providing an Arizona income tax credit for the installation of solar energy devices in Arizona business facilities. Tax Credit Provisions &Limitations An eligible applicant is a business that installs a solar energy device at its Arizona facility.The tax credit is equal to io% of the installed cost of the solar energy device not to exceed$25,000 in credits for one building in a single tax year and $50,000 total credits per business per tax year.Tax credits can be used to offset Arizona income tax liability; any unused credit amounts can be carried forward for a five-year period. Commerce cannot certify tax credits under this program that exceed $1,0oo,000 in any calendar year.Therefore,tax credits are authorized on a first come,first served basis,according to a priority place- ment number issued by Commerce based on the date of receipt of a completion report. Senate Bill 2429,which established the Solar Energy Tax Credit Program, also provided the following: 1. A transaction privilege tax exemption(TPT exemption) on: o The total sales price of solar energy devices sold by retailers that are registered with the Arizona Department of Revenue(Revenue). See A.R.S. §§42-5o61 and 42- 5001. o Gross income from contracts to provide and install solar energy devices.There is no limit on the amount of the contract. The prime contractor must be registered with Revenue to receive the TPT exemption. See A.R.S. §§42-5o75 and 42-5001. 2. A personal property exemption on solar energy devices used for the production of solar energy for on-site consumption.These devices are considered to add no value to real property and,therefore, do not raise property taxes. See A.R.S. §§42-11o54 and 42-1761. The tax credit program is administered through Commerce. However,the TPT and property tax incentives provided by the bill are administered through Revenue. For more information and to download Revenue's forms,visit http://www.azdo:r.gov/ Motion Picture Production Tax Incentives Program The primary goal of the Motion Picture Production Tax Incentives Program is to promote and stimulate the pro- duction of commercial motion pictures in Arizona.The program achieves this goal by providing incentives for qualified motion picture production companies.The program offers the following incentives: • Transaction Privilege Tax Exemption on: o Purchased machinery, equipment and other tangible personal property, o Job printing, embossing, engraving and copying, o Leased or rented lodging space, o Sales of catered food,drink and condiments, and o Construction contracts for buildings and other structures. o Use Tax Exemption-on machinery,equipment and other tangible personal property. o Income Tax Credit-an Arizona transferable income tax credit equal to 10%, 15%or 20% of the com- pany's investment in eligible Arizona production costs. 4 ...........r<.. .. ...... • .., . ., .„ `{� .. ..:. :.: ..,....., _ Iµ Wim» \:y \",, ^.M. .. _ {•r.. .. :n.! 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'F'. ,�Y'i a ��'�•'��t° �"'r a3�'"4 �'.Y�' .S\ t.**. ''S�.`�t�.��• r�:.-������F�,��x`4 r��aYgi �':1,�� �1��Yar � `S�w��e.W�<re�.���,^:J ��;;,,��3���'sy xas"��F�a ..r<� e:?r J.:a,.•:. �y�"?..�4EDa•Y�..•..t.> x,;. ,kr,�,.,:to,.Ar.\.:":�L,,ama::X)bx+?�,.SY„,�:`eii.?<\o�rz�•`a '.,:' ar,.„y\\,a.,,.t¢Ne\ �,,<",•, n C v.;v>hv�a'£$�;:. .'�'�'`:: " The Waste Reduction Assistance Program (WRA) Waste Reduction Assistance program funding is awarded by the Arizona Department of Environmental Quality (ADEQ)to projects devoted to waste reduction,recycling, and composting. WRA projects may include new recy- cling collections, household hazardous waste collections, electronics recycling programs, mulching or compost- ing operations, material processing operations and manufacturing facilities that use recycled material as a feed- stock. Capital improvements to expand existing programs or these types may also be proposed. Eligible appli- cants include private companies, non-profit organizations, political jurisdictions, and Tribal governments within Arizona. Waste Reduction Initiative Through Education Funding(WRITE) Waste Reduction Initiative Through Education funding is awarded by the Arizona Department of Environmental Quality (ADEQ) to projects that educate the citizens of Arizona about waste reduction, recycling, composting, and the opportunities they have to participate. Projects may include multi-media campaigns, school curriculum, seminars and workshops, technical assistance, pamphlets and flyers. Eligible applicants include private compa- nies,non-profit organizations, political jurisdictions, and Tribal governments within Arizona. Recycling Research and Development(RR&D) Recycling Research and Development program funding is awarded by the Arizona Department of Environmental Quality (ADEQ) to projects that involve research, including feasibility studies, solid waste audits and marketing and/or technology development, such as new equipment or processes.The overall objective of these projects is to increase the proper disposal of solid waste, source reduction,recycling,buying recycled content products, and/or composting. Eligible applicants include private companies, non-profit organizations, political jurisdictions, and Tribal governments within Arizona. Pollution Control Tax Credit This tax credit is administered by the Arizona Department of Revenue (AZDOR). The credit provides a 10 per- cent income tax credit on the purchase price of real or personal property used to control or prevent pollution. For further information,please contact the Arizona Department of Revenue: (602) 255-3381. Alternatively, please call the Department of Commerce Business Development Manager, Environmental, at (602) 771-1172. % < x`r\ sstt h"" .. ........ .......... ...: ..: :.... :......... .: ... ";'.,' .:,... ...-.,. .)..'.r* .v�;�..) .A-. "�! tri: :. ... ... :...,•... • v -. .. .. v.: t>% , ..,.... •. v ....< i ' ... ,... .. .. ..::..... .. ........ ......... .. .. ..-.. ., .... t4.y” .a. if , Local I Enterprise Zone The City of Maricopa is located in an Enterprise Zone (see page 3 for details), which provides Property Tax Re- duction & Income or Premium Tax Credits for qualified manufacturers and commercial printers. Details on the Pinal County Enterprise Zone along with a map can be found online at http://pinalcountyaz.gov/Pages/ Ente.rpr.iseZone.aspx Project Fast-Tracking The City of Maricopa, through Council Resolution 07-62, passed unanimously on December 4, 2007, has imple- mented a Fast Track Permitting Process for qualified new, expanding or relocating businesses. Recognizing the need to offer a business-friendly environment which allows businesses to relocate and expand in the community rapidly and efficiently, the City is committed to streamlining and simplifying, where possible, its governmental permitting processes. For more information, contact the Economic Development Department for a program de- tails and application materials or download it from the City website. Inspection Assistance For projects deemed beneficial to the residents of Maricopa,the City may assign a dedicated commercial building inspector to your project during the entire course of the construction process. Development Agreements Development agreements generally give some type of benefit to the developer, such as a repayment for public in- frastructure improvements through sales tax rebates. Arizona municipalities are restricted to providing only tax incentives consisting of reimbursements for public infrastructure and may not exceed or otherwise be dispropor- tionate to the actual cost incurred. Maricopa has in the past entered into development agreements, and is willing to explore this option with any business bringing a high level of economic benefit to the community. Industrial Development Authority The IDA of the City of Maricopa encourages economic growth and job creation in the City of Maricopa by making I low-interest loans available to qualified projects through the issuance of tax-exempt bonds. Financing must meet state bond law requirements, and all projects are reviewed to ensure that financing candidates represent projects that will help to further the community's vision for sustainability. Interest on private activity bonds in most cases are not subject to federal income taxes. For IDA policies,procedures,and application guidelines contact the staff liaison in the City economic development department or visit the IDA page online. Potential Redevelopment District for Downtown Maricopa Efforts are currently underway to establish a redevelopment district in the City of Maricopa for the purposes of revitalizing the area and encouraging private investment .A Redevelopment District requires a plan that lays out broad goals and guidelines for the area to be revitalized. State statutes provide an outline of material to be in- cluded in the plan. In some redevelopment districts,the GPLET(see page 3) can be abated for the first eight years after the certificate of occupancy.Maricopa estimates that this district and the accompanying benefits will be es- tablished by Spring 2009. b : :'ez;aNa�>�\� �Y<R'S• tl51,,g-tie. :x:: w ��}s"gCl of Marico a Economic Develo ment De artmant .x+^..La "�^ fPY S"4 .:t<; �'ea4k4,z - Y ;�� >e-� j >�a ',4',,',..f�r ,pe31•;i'a, �:,sx ..- 4,?°' ,,Ri� ''., , 'i,',—. .-i:', yYCt Y 1,'tJ'.L" a '?t,1a e= � .� *„,Y� '' o " :`*.% ' Iao ,, a * 7.,—,..-'4 a .Jt -- A ........" s econorni developrent(wmaricopa-az.gov CITY .r ':,S•.......ti ..,-...-.......c-...,..,...-;...-,:...r.....^:,..'....,..,,.:...•.,..:.......,.,....te.....,....,.',,...._.<.:.:,.:.'...r,.•...::...y..,,_. �,... ..._.¢.....-...h..............srw.,..•a..F..,.: «S;,^.•.\C-,..•.,'t% ' 5 "..•�ZJ:..vYe."�-`n;�Qs.g:s' ' :3C;,a..:."•...P1.,-:<k^'Yifis,�Q''f yf,'gVS.. 5.t 2 0 -•/l...' 3- 1 6n . 6 8 1 2 v 5 � ` . 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Phoenix , AZ CED - Assistance Programs Page 1 of 5 Phone Directory Mayor/City Council Departments E-Services (36 `r En Espanol Residents Public Safety Businesses Transportation Visitors&Newcomers Culture& Recreation City Government Employment Environment&Sustainability A'Up one level Related Links Assistance Programs Menu F Arizona Prospector 0, Intl Business Home Arizona Job Training Program -The Arizona Job Training R Phoenix Sister Cities 0- Opportunities& Program can defray the costs of training new employees. AZ Dept. of Resources Funds are available on a grant basis, and eligibility for funding Commerce 0' Business Assistance is determined by the number of new hires, wage rates, GPEC Programs benefits, and other basic elements related to your project. The Virtual One Stop 0. Foreign Trade Zone allocation of these resources can range from $2,000 to$5,000 r- Global Business per job. The Arizona Job Training Program also can help Opportunities companies to train existing employees in Arizona through the 0. Employment Centers incumbent worker portion of this job training grant program. Employer Visitation Award amountsoremain within the same range; however, only 0. up to 50% of job training costs are reimbursed, versus 75%for Program new workers.Visit r- Email Us http://www.azcommerce.com/workforce/default.htm for more information. Work Force Services -The City can facilitate access to educational institutions,training opportunities, public and private work force development programs, and day care providers, and can coordinate and broker customized services and programs tailored to meet the special needs of employers. In addition,the City can provide information on labor force availability, employee benefits, salary profiles, and educational statistics. The City of Phoenix has recently completed a labor force survey for the Phoenix metropolitan area. For more information and survey results, visit vvww.usworks.com/Phoenix. Also visit the Phoenix Workforce Connection site for more information on the City of Phoenix Workforce Development programs. Technology Training Tax Credit-Qualified employers can receive state corporate income tax credits for expenses incurred in providing technology skills training. The maximum credit allowed is$1,500 per employee and the maximum number of credits per company is 20. Training must be provided by an accredited institution. Telecommunications Information-The City of Phoenix maintains a composite map of fiber optics conduits installed by telecommunications companies within the city. Maps and company contacts are available upon request. Research & Development Income Tax Credit-The R&D income tax credit is a state tax credit for qualified research and development activities performed in Arizona. Qualifying research must be conducted in Arizona; the credit includes publicly funded research conducted at a university. The http://phoenix.gov/BUSINESS/mrktasst.html 1/15/2009 CED - Assistance Programs Page 2 of 5 maximum credit is$100,000 in year one, $250,000 in year two, $400,000 in year three and $500,000 in year four and subsequent years. The program allows a 15-year carry-forward provision. City of Phoenix Enterprise Zone(COPEZ) - COPEZ makes it more profitable to do business in designated areas of the city. This program offers income and property tax benefits for qualifying businesses that create jobs or make capital investments within the more than 100 square miles of Phoenix designated as an Enterprise Zone. A company located in the zone can claim up to$3,000 per hire for state corporate income tax credits over a three-year period. In order to qualify for the tax credits,jobs must meet certain quality criteria, be new to the company, and 35%of the employees for whom an employer receives tax credits must reside in an enterprise zone upon date of hire. Qualified manufacturing businesses are also eligible for property tax reclassification for five years, resulting in an 80% reduction on primary real and personal property taxes. Visit the City of Phoenix Enterprise Zone: http://www.phoenix.gov/BUSINESS/enterzon.html. Phoenix Industrial Development Authority (PIDA) Bonds- PIDA can provide tax-exempt financing utilizing industrial revenue bonds up to$10 million for the acquisition, construction, equipping or improvement of qualified manufacturing projects located within the City of Phoenix. Qualifying projects generally need to borrow at least$1 million through PIDA for this program to be beneficial. Usually,the interest rate on these bonds ranges from one to three points below the prime interest rate. The interest earned on these bonds is exempt from federal and state income taxation, resulting in the reduction of the overall cost of financing a project. Foreign Trade Zone(FTZ)- Foreign Trade Zone#75, administered by the City of Phoenix, lies within the heart of metropolitan Phoenix adjacent to Phoenix Sky Harbor International Airport. As the zone administrator, the City of Phoenix can also create Foreign Trade Zone subzones for qualifying projects throughout metropolitan Phoenix. Foreign trade zones are used nationally by companies to reduce, eliminate, or defer payment of customs duties on products that are imported into the United States. Additionally, companies operating in the Phoenix Foreign Trade Zone can benefit from an 80 percent reduction in real and personal property taxes. Site Selection -The City of Phoenix works closely with the local real estate brokerage and development community and can provide information on prospective sites, real estate costs, infrastructure, and demographic profiles. Call to arrange a site tour at your convenience. Development Review-The City of Phoenix has a streamlined process to handle all issues related to the physical development of your project in Phoenix. Your proposed project will have one of our staff members assigned to closely monitor it through the city's development process. The City also provides free development assistance services within the Business Customer Service Center.This center provides assistance in navigating the city development process, resolving problems with startup and expanding businesses, and referrals on development process,fee estimates, plan review time frames, and steps necessary for city approval and permits. For additional information please call(602) 534-2000. Relocation Services-The City of Phoenix works closely with corporate relocation firms that specialize in assisting http://phoenix.gov/BUSINESS/mrktasst.html 1/15/2009 CED - Assistance Programs Page 3 of 5 companies relocating their employees to Phoenix. We can provide information on temporary housing, home-buying options, schools, shopping, and amenities. Services are available at no cost to your company. Redevelopment Area Tax Abatement- State of Arizona property tax incentives are available in designated central city redevelopment areas. Under qualifying conditions in such an area, real property may be subject to an excise tax, which is significantly lower than a traditional property tax. This program may also be available outside of redevelopment areas; however, the tax rate would be one and one-half times the rate applied within redevelopment areas. Accelerated Depreciation for Commercial Personal Property -A four-year accelerated depreciation schedule for Class Three and Class Four personal property (including personal property devoted to commercial or industrial use) has been adopted by the State of Arizona. Accelerated depreciation reduces the full-cash value to 40 percent of scheduled depreciated value for the first tax year; 56 percent for the second year; 72 percent for the third year; and 88 percent of scheduled depreciated value for the fourth year. Beginning in the fifth tax year,the schedule reverts to the original levels. Sales and Use Tax Exemption -Transaction privilege(sales) taxes are assessed on the gross proceeds of sales from certain activities. Use taxes are levied on purchases of personal property for use, consumption, storage within the state upon which no tax was paid or a tax was paid to another state at a lower rate than Arizona's. Arizona exempts the sales of machinery or equipment used directly in manufacturing operations and R&D from both the state transaction privilege tax and state use tax. Business Customer Service Center(BCSC)-The BCSC serves as a one-stop service center for businesses and customers seeking development information and/or are interested in developing property or starting a business in Phoenix. The Business Customer Service Center serves as a customer consultant in navigating the city development process and assists in resolving problems with start-up and expanding businesses.The BCSC provides information and referrals on development process,fee estimates, plan review time frames, and steps necessary for city approval and permits. On-Line Permitting Services-The City of Phoenix uses a Web-based permitting system, allowing customers to see real- time permit information and project status. Customers can request and cancel inspections, view inspector comments, and track permit history. Annual Facilities Permit(AFP)-Phoenix's AFP program simplifies the permitting and inspection process by maintaining inspectors who are familiar with a specific facility's construction and can review related plans. Participating facilities are exempt from conventional permits for work regulated by the construction code when such work does not increase the floor area and is performed on the facility's existing buildings, structures and utilities.The facility must be engaged in manufacturing, processing or service and contain specialized buildings and service equipment that require full-time maintenance staff. Management Technical Assistance (MTA)-To assist small http://phoenix.gov/BUSINESS/mrktasst.html 1/15/2009 CED - Assistance Programs Page 4 of 5 businesses, Phoenix's Management Technical Assistance program provides access to private business consultants at no cost. MTA consultants provide expertise in general business and marketing, financing and loan packaging, business needs assessment and workforce development. Other technical areas may be available. Expansion Assistance and Development Program (EXPAND) - Phoenix's EXPAND program encourages lender participation by reducing lender risk through collateral enhancement. EXPAND reserve deposits are pledged in amounts from 25%to 50% of a loan with a ceiling of$150,000. Capital Access Program (CAP)-The City of Phoenix's Capital Access Program encourages lenders to make loans that present a moderately higher risk than normally considered. Eligible businesses are commercial enterprises in the City's Enterprise Community, smaller manufacturers, wholesalers, and distributors. CAP loans are made directly through a bank and qualifying businesses will pay a market rate of interest, plus a premium up to 6 percent of the loan amount. The loan premium is matched by the City of Phoenix Industrial Development Authority to reduce lender risk. For more information on the City of Phoenix's Capital Access Program and other small business financing programs, visit: http://www.phoenix.gov/BUSINESS/smallbus.html#finance. New Markets Tax Credit-The Phoenix Community Development and Investment Corporation (PCDIC), a non-profit corporation, has received an allocation totaling $170 million from the U.S. Department of Treasury, Community Development Financial Institutions Fund. With this significant allocation, PCDIC will be offering loans and equity investments to qualifying commercial, retail, and industrial projects and small businesses in under-served areas of Phoenix with the intent of improving the economic conditions of those areas. High-Growth Entrepreneur Resources-This matrix of services was compiled to meet the needs of High-Growth Entrepreneurs: "individuals who lead small businesses that are based on knowledge, innovation, new technology, and are designed to grow quickly."This includes businesses with innovative, patented technology and businesses that were created with a business model of rapid growth. Back to Phoenix Labor Selected Corporate Top Overview Force Tax Summary Labor InfrastructureQuality of Assistance Force Life Programs tlY1i.?ifWRY6v1YS.YNs>XfatvA.iM SRYfKHNJ.M1i{?uRiXWABMaP.X119.9k�A'+fLTiKifl4d!MKNaM1➢.YfS:h'R'4sY0Yi9'..R'ftf;YGfN.-StMK61R'.tl1!nMItM:Yf.^.X!^`..^l:iWlNAitf.Hb.'.fs1Af9.iKNNvdIM%KgAHfi.WA�.'AVritfA>tM1NNW.W.3WVHkNAM%IiWiAE'M1AYI.Y!6VA:MfAC53Ff1N1..W.11kf5. City of Phoenix Call: Community and Economic 602.262.5040 Development Department Fax: 200 West Washington Street, 602.495.5097 20th Floor TTY: Phoenix, Arizona 85003 602.534.3476 Email: Click here to send The city of Phoenix provides accessibility to information, participation, services and employment for persons with disabilities. This guide may be made available in the following alternative formats: large print, braille or audio- tape by calling (602) 534-CITY (2489). http://phoenix.gov/BUSINESS/mrktasst.html 1/15/2009 CED - Assistance Programs Page 5 of 5 Contact Us Accessibility Privacy Policy Security Technical Help Shop Phoenix ©Copyright 2009 City of Phoenix,all rights reserved http://phoenix.gov/BUSINESS/mrktasst.html 1/15/2009 CED - New Markets Tax Credit Page 1 of 2 Phone Directory Mayor/City Council Departments E-Services M....a En Espanol Residents Public Safety Businesses Transportation Visitors&Newcomers Culture& Recreation City Government Employment Environment&Sustainability Up one level Related Links Phoenix New Markets Program Menu ► Arizona Prospector It Overview The Phoenix New Markets program will offer commercial 0- Phoenix Sister Cities Assistance Programs real estate and small business loans to Qualified Active Low- ► Virtual One Stop MTA Income Community Businesses that are in or that relocate to a Business Survey BRE low-income areas of Phoenix. Bond Financing A qualified business is defined as any corporation (including a SB Financing nonprofit corporation) or partnership if, for any taxable year, Redevelopment meets the following federal requirements: Opportunities ► New Markets Program 1)The business or project is or will be located ► Community in a federally designated Low-Income Census Development Tract within the cit of Phoenix: (Map of ), Sports Development qualified areas.) Retail Development 2)At least 50 percent of the total gross income is generated from the business or project located within a low-income community; 3)At least 40% of the business' physical assets(whether owned or leased) are located within the low-income community; 4)At least 40% of the employees' services are performed for the business in any low-income community; 5) Less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity is attributable to collectibles (as defined in IRC§408 (m)(2))other than collectibles that are held primarily for sale to customers in the ordinary course of such business; 6) Less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity (as defined in IRC §1397C(e)) is attributable to nonqualified financial property; and 7)The business is not involved in the operation of the following: farming, financial services, golf courses, country clubs, massage parlors, hot tub facilities, suntan facilities, racetrack or other gambling facilities, development of or holding of intangibles for sale, or packaged liquor sales. http://phoenix.gov/ECONDEV/nmtcinfo.html 1/15/2009 CED - New Markets Tax Credit Page 2 of 2 The goal is to improve the economic conditions of Phoenix's underserved communities. The primary beneficiaries will be residents and businesses located in these targeted areas.The recipients of Phoenix New Markets financing must demonstrate that their business or project provides one or more of the following community impacts and will need to report this information annually during the life of the loan: • Create jobs • Pay higher wages • Hire women and • Provide training minorities programs • Provide • Other as defined subcontracting by the business opportunities for minority or woman owned businesses City of Phoenix Call: Community and Economic 602.262.5040 Development Department Fax: 200 West Washington Street, 602.495.5097 20th Floor TTY: Phoenix, Arizona 85003 602.534.3476 Email: Click here to send The city of Phoenix provides accessibility to information, participation, services and employment for persons with disabilities. This guide may be made available in the following alternative formats: large print, braille or audio-tape by calling (602) 534-CITY (2489). Contact Us Accessibility Privacy Policy Security Technical Help Shop Phoenix ©Copyright 2009 City of Phoenix,all rights reserved http://phoenix.gov/ECONDEV/nmtcinfo.html 1/15/2009 Sahuarita , AZ SAHUARITA CRITERIA FOR THE CONSIDERATION OF ECONOMIC DEVELOPMENT TOOLS BACKGROUND DRAFT As part of the evaluation process to determine the viability of any incentive/financing mechanism or other economic development tool to be offered to a developer of a business project or a company looking to locate within the Town of Sahuarita, an evaluation will need to be undertaken regarding how the proposed project or development supports the strategic economic development goals of the Town of Sahuarita. A company's request for any incentive, subsidy, waiver of fees, use of bonds, etc. will need to include an explanation of how the project supports the Town's need to develop a local, diversified, and sustainable economy. TYPES OF INCENTIVES Types of incentives/funding mechanisms to be considered may include, but are not limited to: • Public infrastructure reimbursement utilizing sales tax dollars generated from the project • Tax Increment Financing (Specific property tax waivers may apply) • Tax Exemption/Abatement • Tax Credits • Grants • Loans/Loan Guarantees • Private Activity Bonds (formerly Industrial Development Authority) • Redevelopment Authorities/Districts • Community Facilities District (CFD) • Municipal Improvement Districts • Commerce & Economic Development Commission (CEDC) • Economic Strength Project Program(ESP) • Arizona Enterprise Zone Program (EZ) In today's development market,time is money. Efficient timing for the project to be completed is important to both investors and the community. Additional economic development tools that may be utilized to address this issue include: • Shovel Ready Sites • Fast Track Permitting • Land Banking TOWN GOALS/OBJECTIVES IN CONSIDERING USE OF ECONOMIC DEVELOPMENT TOOLS In order to be considered for any incentives, the proposed project would need to incorporate any or all of the following: • Provide needed services/products for residents and others • Reduce sales tax leakage • Generate incremental revenues for the town • Bring employment opportunities with benefits Basic Components for Project Consideration • Clearly defined goals and objectives • Definition of eligibility criteria and threshold investment • A process for evaluation • Performance standards and a contract • Monitoring procedures and penalties policies Strategic Economic Development Goals for the Project The proposed project must include (but not be limited to): • Identification of a public benefit and value of the project. • Projection of public costs related to the project • Bringing forward needed public infrastructure development within the Town • Bringing employment opportunities to the Town for residents and others. • Generating incremental net revenues to the Town. • Complying with State of Arizona statutes pertaining to municipalities using specific economic development tools such as sales tax reimbursement. • Supporting the provisions laid out in the Town's General Plan relative to building standards, codes, safety requirements, and environmental concerns. • Adhere to the goals and objectives of the Sahuarita Town Center and Santa Cruz. River Corridor Subarea Plan (where appropriate) and incorporate those into the project. Working in collaboration with Town staff, the following information is required from the applicant in order to assess the project relative to the above criteria. 1 A , COSTBENEFIT ANALYSIS Public costs associated with the project, and public benefit derived from those costs, must be identified. A cost benefit analysis is required for the project and needs to include the following: • Will the proposed development bring additional costs to the town? What are these costs and are they recurring? • Will the project bring public benefit? If so, what is that benefit and what value does it have, monetarily or otherwise? • What is the dollar amount of the public benefit and how does it compare to the dollar value of the incentive? • Does the town see any additional benefits that should be added to the project? Corporate disclosure of the business case justifying this project is required. This disclosure can include but is not limited to: • Relevant company information pertaining to the business' actual costs of the project, including financial requirements and mechanisms, in a business plan format. • The size of the project in square footage terms. • The timing for the start and completion of the entire project. • What costs are reimbursable, which are not, and what documentation is required. Performance standards for the project are required and include: • Achievement of required revenues, against which reimbursements or incentives will be calculated, within an agreed timeline. • Implementation and conclusion of the project within an agreed timeline and occupation of the building (s) within an agreed time. • If jobs are part of the criteria,the number of jobs, whether they have benefits and the timing that the jobs come online needs to be included. 1. Breach of contract will be determined through monitoring and disclosure Define "breach of contract" and define exceptions. (This will need to be articulated by our legal dept. with input from staff.) Reasonable exceptions to breach of contract need to be defined. Monitoring practices will be specified to ensure that the project is progressing against the agreed timeline with the goal of ensuring that performance standards are met. 2. Penalties for breach of contract will be defined in the contract 1 � Include non-performance provisions, i.e. timelines not met, revenues not achieved as forecast, costs higher than projected, reimbursement requirements under estimated, employees not hired as agreed, benefits not applicable, etc. Penalties can include "clawbacks" i.e. company reimburses Town for monies already paid under specific conditions, additional charges to the company, recalibration of the agreement to reflect changing business conditions, rescission of the agreement, reimbursement of attorneys fees with interest, etc. *Contract needs to specify ownership of infrastructure covered under the reimbursement and designate responsibility for future maintenance of same. *Contract needs to specify whether the engineering and construction work needs to be bid and what, if any, infrastructure in the total development is not covered by the reimbursement agreement. *Contract needs to exclude any fees that may be requested for reimbursement but are not included in the agreement. Project Evaluation Process • Potential applicant discusses project components with Town of Sahuarita Economic Development Manager and is provided with criteria for economic development tools. Criteria may be provided in advance of the meeting so that applicant is prepared to ask questions relative to the criteria and the proposed project. • If the applicant wishes to pursue the use of any of the economic development tools,the applicant submits proposal in a business plan format to the Economic Development Manager, following the requirements and guidelines outlined in the criteria. • The Economic Development Manager puts together a team of appropriate staff to evaluate the proposal, focusing on how well the proposal links project components to the town's criteria. The team may include, but is not limited to, Town Manager, Asst. Town Manager, Director of Finance, Director, Planning and Zoning, Building Official, Town Engineer. • Project team evaluates the proposal against the criteria identifying where additional information is needed and/or if the proposal does not meet the criteria thoroughly enough for further consideration. • Economic Development Manager undertakes ongoing dialogue with the applicant seeking additional information and providing feedback from the evaluation team, as appropriate. • When staff feel the proposal has been thoroughly vetted against all criteria, staff make a recommendation for approval/disapproval asking the Economic Development Commission and Planning and Zoning Commission to review the proposal, making their own recommendation for approval or disapproval, providing specific input to support their their recommendations. The proposal is also put before the Financial Advisory Committee for their evaluation and input. • • Public notices are made for each of the Commission meetings (or potential joint meetings) so that residents and others may attend and address comments to the proposals. • Staff then make a formal recommendation for adoption or rejection, forwarding that recommendation to the Town Council for approval/disapproval, providing information to the Council on findings from the reviews undertaken by the Economic Development Commission, Planning and Zoning Commission, and the Financial Advisory Committee. • The project is put on a future Council agenda for discussion and action. • Applicant is advised of action taken by the Council. If approval is received and direction given from the Council, contracts will then be drawn up within an agreed timeframe and the project will move to implementation. Winslow , AZ CITY OF WINSLOW ECONOMIC DEVELOPMENT POLICY Goal The goal of the City of Winslow Economic Development Policy shall be to provide the City Council and Administration with a set of guidelines that will assist in the retention and expansion of existing businesses and the attraction of new businesses to the City of Winslow, resulting in the diversification and expansion of the existing tax base and the creation of new employment opportunities. Policies The City may consider offering incentives in order to attract, retain, or expand businesses. These incentives will only be used when the City is assured that the addition of the new business or retention and/or expansion of an existing business would have a proportionately significant, positive effect on the Winslow economy. Diversification and expansion of the local economy, which will maximize the development of basic industry, is vital for the continued economic health of the City. This policy emphasizes new and existing businesses that generate significant sales tax revenues. Existing market conditions and trends in Winslow result in the following major sectors presenting significant opportunities for economic growth, which shall be defined as Critical Economic Sectors: 1. Regional Retail, 2. Value-Added Industry (industries that create new products from existing resources), 3. General and Segmented Tourism, 4. Transportation, 5. Regional Workforce Housing, and 6. Downtown Redevelopment. The City shall only offer incentives within the constraints of its current adopted budget. General Provisions The following general provisions shall be considered prior to the City's offering incentives. 1. Incentives will only be offered if the City determines such incentives are reasonably necessary to retain and/or expand an existing business or to attract a new business to the City, including: • A situation in which incentives are needed to induce a new business to locate its operation in the City of Winslow. • A situation in which the City of Winslow has determined that the retention of an existing business is critical to the economic well-being of the community. • A situation in which the City of Winslow is competing with other cities for the expansion of an existing business in the City or where the City determines that incentives are necessary to affect the expansion of an existing business. e r • A situation in which incentives are needed to induce a business to relocate or expand its operation to the City of Winslow from an existing site in another city. 2. The business must have a substantial positive economic impact on the community, i.e.; j Y the number of obs created or the sales tax created by the project in the long-term will offset the short-term costs offered by incentives. Additionally, the project will be of such size or consequence to produce significant employment or sales in related sectors. Specific factors to be considered in determination of economic impact shall include: • The number of jobs created and the salary level of said jobs. • Anticipated long-term sales tax to be generated by the project. • Secondary (spinoff) employment, investment and/or sales tax reasonably likely to occur. 3. An emphasis shall be placed on firms that provide significant diversification and/or expansion(within Critical Economic Sectors) of the City's economy. 4. The City will generally not purchase land or existing buildings or construct buildings for purely private objectives. The City's position shall be to offer incentives that have a direct and demonstrable relationship to public benefit. Improvements including streets, water lines, traffic signals, storm drainage,parking structures, parks and open space, and similar publicly assessed improvements are examples of public-private financed incentives. Acquisition of property and construction of buildings, if necessary, must be clearly and directly related to a public purpose. 5. Private funding shall be utilized for initial identified project costs to be later reimbursed by the City to avoid straining the City's operational or bonding capacity and reduce the City's front-end risks, with the exception of façade rehabilitation assistance for Downtown Redevelopment. 6. Incentives can be utilized for Downtown Redevelopment (within the Route 66 corridor), Regional Retail (City-wide), and Value-Added Industrial businesses (City- wide). Cit -wide). Incentives shall not be used for businesses in Critical Economic Sectors in which market forces alone have been determined sufficient to attract, retain, or expand businesses, such as Regional Workforce Housing. Development fees and/or other assessments may be imposed on rapidly growing, self-supporting Critical Economic Sectors in order to partially fund incentives for businesses in competitive Critical Economic Sectors. The City may also waive such development fees and/or other assessments in part or in whole in support of this policy. 7. In certain instances, incentives may be offered in conjunction with annexation activities, which are viewed as strategically important. In the case of large-scale development areas, incentives should be combined with a community facilities district, where feasible, to offer maximum flexibility in attracting development. 8. The intangible or immeasurable benefits of a business to the City, such as the location of a headquarters facility, enhancement of attractiveness to other similar businesses or suppliers, or other similar image-related items are also significant and shall be considered along with other factors when making decisions on incentives. 9. Regional Retail projects that qualify for incentives shall generate significant sales tax revenues similar to projects normally identified at a regional shopping center level. 10. New Regional Retail projects that qualify for incentives shall have an emphasis on meeting a need not currently being filled in the community, or providing a higher level of service/goods/products than presently available. 11. The City Council shall have authority to approve or deny all requests for economic development incentives. 12. The City Council may evaluate any negative impacts on the community in making its decision, i.e., pollution, noise, odors, etc. 13. Each City Council action shall be deemed separate and independent from all other actions associated with the approval of the use of an incentive. 14. In addition to City incentives, the State of Arizona offers a wide variety of economic incentives to encourage high-wage job growth and capital investment. The Arizona Department of Commerce is the central source of information for Arizona's business incentives, which is located at http://www.azcommerce.com/BusAsst/Incentives/. City of Winslow Incentives The City Council may consider, and approve the following incentives on a case-by-case basis: • Partial rebate of sales tax collected not to exceed fifty (50%) percent on construction materials purchased in the City. • Partial rebate of sales tax collected not to exceed twenty-five (25%) percent of new tax generated. • Façade rehabilitation assistance for Downtown Redevelopment. • Building and permit fees reduction or waiver. • Expedited permitting process and site location assistance. • Zoning assistance (through Special Development Approval Option). FISCAL YEAR 2009/2010 BUDGET PREVIEW TIMELINE UPDATE • No later than April 1, 2009— Delivery of 5-YEAR FISCAL STABILIZATION PLAN to the Town Council • Will include a balanced budget recommendation for FY 2009/10 with projected revenues and expenditures through FY 2013/2014 • Recommend a Council Study Session scheduled to present the 5-Year Fiscal Stabilization Plan • Subsequent Council budget work sessions can be scheduled as needed thereafter