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HomeMy WebLinkAbout12/20/2005 Blue Sheet Tangerine Commerce Park Development Agreement TOWN COUNCIL MEETING INFORMATION TOWN OF MARANA MEETING DATE: December 20, 2005 AGENDA ITEM: J. 1. b. TO: MAYOR AND COUNCIL FROM: Frank Cassidy, Town Attorney SUBJECT: Resolution No. 2005-157: Relating to Development; approving and authorizing the execution of a right-of-way exchange and de- velopment agreement with CEMEX, Inc., and Cottonwood Prop- erties, Inc., regarding the Tangerine Commerce Park development project. DISCUSSION This development agreement involves the Tangerine Commerce Park Project which is the subject of a specific plan on tonight's agenda. Among other things, this right-of-way exchange and de- velopment agreement includes the following key elements: · The developer will deed to the Town the right-of-way necessary for the re-alignment of Tangerine Road into Tangerine Farms Road in exchange for right-of-way of existing Tangerine Road to be abandoned when the new Tangerine Farms Road is completed. · The developer commits to pay its fair share improvement district assessment on the com- mercial portions of the Tangerine Commerce Park property, based on a frontage foot formula contained in the agreement. · The various transportation and drainage issues related to the freeway frontage road and the re-alignment of Tangerine Farms Road are addressed. · The future extension of water and sewer improvements from the Gladden II development are addressed, with the developer agreeing to pay the cost to the extent necessary to serve the commercial portions of the Tangerine Commerce Park property. · The developer is obligated to pay for other streets that serve the commercial property and a future intersection signal at Tangerine Farms Road and Tangerine Road. · It obligates CEMEX to pay a five-cent-per-ton resource fee on a quarterly basis. · It expressly authorizes impact fee credits for any developer-funded Tangerine Farms Road and Tangerine Road improvements, if a commercial transportation impact fee is ever adopted by the Town. {00001592.DOC I} FJC/cds 12/14/05 . It addresses the payment of a $500-per-acre levee fee as required by Marana Ordi- nance No. 99.02. . It establishes protected development rights for the property consistent with the specific plan for the twenty-year term of the agreement, but expressly authorizes the Town to ap- ply to the property ordinances and regulations of general application that apply to all similarly situated properties. RECOMMENDATION Staff recommends adoption of Resolution No. 2005-157, approving and authorizing the execu- tion of the Tangerine Commerce Park Right-of-Way Exchange and Development Agreement. A TT ACHMENT(S) Tangerine Commerce Park Right-of-Way Exchange and Development Agreement. The exhibits to the Agreement will be provided separately to Council. SUGGESTED MOTION I move to adopt Resolution No. 2005-157. {00001592.DOC /} -2- MARANA RESOLUTION NO. 2005-157 RELATING TO DEVELOPMENT; APPROVING AND AUTHORIZING THE EXECUTION OF A RIGHT-OF-WAY EXCHANGE AND DEVELOPMENT AGREEMENT WITH CEMEX, INC., AND COTTONWOOD PROPERTIES, INC., REGARDING THE TANGERINE COMMERCE PARK DEVELOPMENT PROJECT. WHEREAS, CEMEX, Inc., and Cottonwood Properties, Inc., desire to finalize a specific plan for the development of Tangerine Commerce Park; and WHEREAS, CEMEX, Inc., Cottonwood Properties, Inc., and the Town desire to enter into a right-of-way exchange and development agreement to further clarify the obligations of the parties relative to the development of the property pursuant to the specific plan for Tangerine Commerce Park; and WHEREAS, the Mayor and Council find that the terms and conditions of the proposed Tangerine Commerce Park Right-of-Way Exchange and Development Agreement are in the best interest of the Town. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, that the right-of-way exchange and development agreement between the Town of Marana, CEMEX, Inc., and Cottonwood Properties, Inc., attached to and incorporated by this reference in this resolution as Exhibit A is hereby approved, and the Mayor is hereby authorized to execute it for and on behalf ofthe Town of Marana. BE IT FURTHER RESOLVED that the Town's Manager and staff are hereby directed and authorized to undertake all other and further tasks required or beneficial to carry out the terms, obligations, and objectives of the aforementioned agreement. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 20th day of December, 2005. Mayor Ed Honea ATTEST: Jocelyn C. Bronson, Town Clerk APPROVED AS TO FORM: Frank Cassidy, Town Attorney {00001593.DOC /} FJClcds 12/14/05 TANGERINE COMMERCE PARK RIGHT-OF- WAY EXCHANGE AND DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT ("Agreement") is made by and among the TOWN OF MA- RANA, an Arizona municipal corporation (the "Town"), CEMEX, INC., a Louisiana corporation (the "Owner") and COTTONWOOD PROPERTIES, INC., an Arizona corporation (the "Commercial Owner"). The Town, the Owner and the Commercial Owner are collectively referred to in this Agreement as the "Parties", anyone of which is sometimes individually referred to as a "Party". RECITALS A. The Owner owns approximately 494 acres of real property (the "Property"), within the corporate limits of the Town, as depicted on the overview map attached as Exhibit A with the parcels legally described on Exhibit B (individually "Resource Extraction Parcel_" with the blank filled in with the corresponding letter designation shown on Exhibit B and collectively the "Resource Extraction Property") and Exhibit C (individually "Commercial Parcel_" with the blank filled in with the corresponding letter designation shown on Exhibit C and collectively the "Commercial Property"). The Owner intends to sell the Commercial Property to the Com- mercial Owner or its assignee. B. Tangerine Road west ofI-IO (referred to in this Agreement as "Tangerine Farms Road") is being realigned and extended by the Town to improve the geometry of the freeway inter- change and to serve as a major arterial roadway for northwest Marana. The Town also currently plans a future link road (referred to from this point forward in this Agreement as "Tangerine Road") extending from Tangerine Farms Road over the Santa Cruz River to Avra Valley Road. C. To facilitate the construction of the realigned Tangerine Farms Road and the future con- struction of Tangerine Road, the Town needs from the Property the public rights-of-way de- scribed in Exhibit E (the "Tangerine Farms Right-of-Way"), Exhibit F, (the "Street A Right- of-Way") and Exhibit G (the "Tangerine Road Right-of-Way"). D. Upon completion of realigned Tangerine Farms Road, the Town will no longer need the existing Tangerine Farms Road right-of-way located north of Commercial Parcel A (the "Trade Parcel"). E. The combined size and value of the Tangerine Farms Right-of-Way, the Tangerine Road Right-of-Way and the Street A Right-of-Way exceed the size and value of the Trade Parcel. F. The Owner and the Commercial Owner are willing to exchange the Tangerine Farms Right-of-Way, the Tangerine Road Right-of-Way and the Street A Right-of-Way for the Trade Parcel pursuant to the terms of this Agreement. G. Arizona Revised Statutes Section (A.R.S. s) 28-7203 authorizes the exchange of a public roadway for a new public roadway. {00001480.DOC /9} 12113120052:34 PM TANGERINE COMMERCE PARK REAL ESTA TE EXCHANGE AND DEVELOPMENT AGREEMENT - I - H. The Town desires to have the land described in Exhibit D (the "Linear Park Land") dedicated to the public for future development of a public park along the Santa Cruz River. I. The Parties also desire to address other development and transportation issues relating to the development of the Property and the construction of roadway improvements in the vicinity of the Property. J. The following are among the development regulations that now and will hereafter apply to the Property, which together with and supplemented by this Agreement, are referred to collec- tively as the "Applicable Town Regulations": (i) The Tangerine Commerce Park Specific Plan (the "Specific Plan") adopted Decem- ber 20,2005. (ii) The Town's written rules, regulations, procedures, and other policies relating to the development of land, whether adopted by the Mayor and Councilor by Town Staff (collec- tively the "Marana Development Code"). (iii) Amendments to the Marana Development Code and other Town ordinances and regulations adopted in furtherance of the public health, safety and welfare of the Town that are of general application; that is, they apply to all similarly situated properties throughout the Town without amending the development requirements of the Owner and Commercial Owner under the Specific Plan or this Agreement. K. Pursuant to A.R.S. S 9-500.05, as amended, the Town, the Owner and the Commercial Owner enter into this Agreement to, among other things, facilitate development of (i) public im- provements to and on the Property and (ii) the Property by providing for and establishing the types, location, density and intensity of land uses, including the development of housing and recreation/open space and continued resource extraction as described in the Specific Plan, and incorporating the development regulations and procedures referred to in it. L. The Town, the Owner and the Commercial Owner desire to enter into this Agreement to implement the Specific Plan and the Marana General Plan. M. The Town desires to collect a fee of five cents per ton of material removed from the Re- source Extraction Property ("Resource Fee") to offset the impacts associated with development on the Resource Extraction Property. N. The Property receives storm water inflows from the east side of 1-10 and passing through the Tangerine Farms Road underpass and from the southeast comer of the Property (collectively "Storm Water Inflows"). To provide for orderly development of infrastructure and potential retail sales tax revenue from the Commercial Property, the Parties desire to eliminate sheet flooding from the Storm Water Inflows by directing them to Resource Extraction Parcel A with an approximate area of 35 acres and a current depth of 50 feet (the "Retention Basin"). The Town desires to obtain an easement (the "Drainage Easement") within the land described on Exhibit H for construction of drainage facilities (the "Interchange Drainage Structure") to convey Storm Water Inflows from the east side ofI-I0 to the Retention Basin. O. The frontage road south of 1-10 between Moore Road and Tangerine Farms Road cur- rently accommodates two-way traffic and is separated from the eastbound 1-10 Tangerine Farms Road off ramp. The Arizona Department of Transportation ("ADOT") has indicated that it will not review or approve roadway improvements affecting the Tangerine Farms Road 1-10 inter- {00001480.DOC /9} 12113/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 2 - change unless this portion of the frontage road is changed to one way eastbound and merged with the eastbound Tangerine Road 1-10 off ramp or modified in some functionally equivalent way that eliminates the off ramp's close proximity to the current two-way frontage road. These re- quired improvements together with Street A (as defined in paragraph 2.3 below) are referred to in this Agreement as the "One-Way Frontage Road Improvements." P. Water and sewer infrastructure needed to serve the Commercial Property and other nearby properties is currently anticipated to be connected through the proposed Gladden Farms II resi- dential development project located in Section 35, Township 11 South, Range 13 East ("Glad- den II"). Q. The Town and the Pima County Flood Control District entered into an agreement for the Lower Santa Cruz River Flood Control Levee Project as recorded in Docket 10732 Page 881 of Pima County Records under which the Town is required to submit payments to the Flood Con- trol District in the amount of $500 per acre (the "Levee Fee") for certain portions of the Prop- erty. To implement the Levee Fee, the Town adopted Ordinance No. 99.02, which requires the Levee Fee to be paid pursuant to a development agreement. R. The Town, the Owner and the Commercial Owner understand, acknowledge and agree that (i) this Agreement is a "Development Agreement" within the meaning of, and entered into pursuant to the terms of, A.R.S. S 9-500.05, as amended, and (ii) the terms of this Agreement are binding upon the Town, the Owner, the Commercial Owner and their successors and assigns and shall run with the Property. S. The Town finds that the development of the Property pursuant to the Applicable Town Regulations will result in significant planning and economic benefits to the Town and its resi- dents by: (i) facilitating development of the Property consistent with the Town's General Plan; (ii) providing open space and recreation areas; (iii) generating revenues to the Town based on the terms of this Agreement; (iv) generating sales tax from retail and construction activities on the Property; and (v) creating jobs through employment and construction activity on the Property. AGREEMENT Now, THEREFORE, in consideration of the foregoing premises and the mutual promises and agreements set forth in this Agreement, the Parties hereby agree as follows: Article 1. Exchange of Public Right-of-Way and Dedication of Land 1.1. Conveyances to the Town. Within thirty days after the Effective Date of this Agreement, the Owner shall duly execute and deliver to the Town for recording one or more deeds in a form reasonably acceptable to the Town Attorney conveying to the Town without cost the Tangerine Farms Right-of-Way, the Street A Right-of-Way, the Tangerine Road Right-of-Way, and the Linear Park Land, and granting to the Town without cost the Drainage Easement. 1.2. Conveyance from the Town. Once the re-alignment of Tangerine Farms Road has been completed on the Property, the Town shall convey the Trade Parcel to the then-owner of Commercial Parcel A by causing a deed in a form reasonably acceptable to the grantee to be duly {00001480.DOC / 9} 12/13/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 3 - executed and delivered to the then-owner of Commercial Parcel A. The Town agrees to use its good faith efforts to complete the re-alignment of Tangerine Farms Road on the Property as soon as reasonably possible. If the then-owner of Commercial Parcel A gives the Town a written re- quest to record the deed before the re-alignment of Tangerine Farms Road is completed on the Property, the Town shall promptly convey the Trade Parcel to the grantee so long as the grantee allows the Town to continue using the Trade Parcel at no cost until the re-alignment of Tangerine Farms Road is completed. 1.3. Reservation of Easements in Trade Parcel. The deed for the Trade Parcel shall comply with A.R.S. ~ 28-7210, requiring the reservation of easements for certain utilities and similar uses; provided, however, that the Parties will cooperate in good faith to persuade the owners of utilities or other facilities in the Trade Parcel that the then-owner of Commercial Parcel A wants relocated to relocate them to the re-aligned Tangerine Farms Road and to release any rights in the Trade Parcel. 1.4. Boundary Adjustments. If construction of a public road within any of the rights-of-way requires a realignment of that right-of-way, the Town and the owner of the relevant portion of the Property shall cooperate to adjust the right-of-way boundaries provided that the total amount of land within all of the right-of-way dedicated by the Owner and abandoned by the Town shall remain substantially the same. 1.5. Dedication to the Pima County Flood Control District. Within ten days after the Effec- tive Date of this Agreement, the Owner shall dedicate to the Pima County Flood Control District without cost the portion of the Property identified in the Specific Plan as "Floodway to be dedi- cated to Pima County" lying within the channel of the Santa Cruz River. Article 2. Bond-Funded Public Infrastructure Improvements 2.1. Applicability. The provisions of Article 2 and Article 3 shall only apply and become ef- fective if the Town establishes not later than December 31, 2007 a municipal improvement dis- trict or other special district for the purpose of financing and constructing the Tangerine Farms Road Improvements. 2.2. Tangerine Farms Road Improvements. The Town shall construct and thereafter maintain Tangerine Farms Road as a four-lane divided roadway within the Tangerine Farms Right-of-Way and extending westward approximately 3.8 miles to Moore Road, with curbs and gutters, median breaks and turn lanes for proposed major street intersections, street lights, a multi-use pathway, a 16" potable water main, a 8" non-potable water main, landscaping, sewer, the Interchange Drainage Structure and the One-Way Frontage Road Improvements (collectively the "Tangerine Farms Road Improvements"). Those portions of the Tangerine Farms Road Improvements within the Property are generally depicted on Exhibit I. 2.3. Street A Improvements. To construct Tangerine Farms Road in compliance with ADOT requirements, the Town desires to temporarily close a portion of the frontage road along 1-10. To facilitate traffic flow during the temporary frontage road closure, the Town will construct a minimum necessary two-lane road that consists only of pavement and work related to it within the Street A Right-of-Way ("Street A") and a full median opening on Tangerine Farms Road to serve Street A. The Town reserves the right to close the median opening at its own expense as and when the Town in its sole discretion deems the closure appropriate to facilitate efficient traf- fic movement in the vicinity of the Tangerine Road and 1-10 interchange. Prior to construction of {00001480.DOC /9} 12113/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 4 - Street A, the Town shall request input from the Commercial Owner on any widening or other enhancements the Commercial Owner requests for Street A and shall incorporate the enhance- ments into Street A provided the Town in its reasonable discretion determines that the additional improvements are consistent with the Applicable Regulations and the incremental additional cost ofthe additional improvements are paid by the Commercial Owner. Article 3. Participation in Tangerine Farms Road Improvements Cost 3.1. Definitions. The following definitions shall apply to this Article: 3.1.1. The "Allocated Assessment" is (C -;- F) x T, where C is the Commercial Property Frontage, F is the Total Frontage, and T is the Total Improvement Cost. 3.1.2. The "Commercial Property Frontage" is the frontage of the Commercial Prop- erty along the Tangerine Farms Road Improvements. 3.1.3. "Frontage" is distance in linear feet measured from the centerline of the right-of- way for the Tangerine Farms Road Improvements. 3.1.4. "Individual Parcel Improvement Costs" are costs that predominately benefit an individual parcel, such as traffic signals, sleeving for future traffic signals, water and sewer improvements to the extent necessary to serve an individual parcel and that do not benefit all of the land fronting on the Tangerine Farms Road Improvements, the proposed park under- pass within Gladden Farms, upgrades to Street A, and undergrounding of Cortaro Marana Ir- rigation District facilities for purposes other than road crossings. The cost of the Tangerine Farms Sewer Extension is a component of the Individual Parcel Improvement Costs associ- ated with the Commercial Property. 3.1.5. The "Tangerine Farms Sewer Extension" is the extension within the Tangerine Farms Right-of-Way of the sewer (see paragraph 4.6 below) to serve the Commercial Prop- erty. 3.1.6. The "Total Improvement Cost" is the construction cost of the Tangerine Farms Road Improvements together with all related engineering, legal, financial and incidental costs. The Total Improvement Cost shall be no greater than Twenty Million Dollars ($20,000,000). The Total Improvement Cost shall not include Individual Parcel Improvement Costs. 3.1.7. The "Total Frontage" is the total combined frontage of all privately owned land on both sides ofthe Tangerine Farms Road Improvements. 3.2. Assessment Allocation. The Commercial Owner shall pay the Allocated Assessment and the Individual Parcel Improvement Costs attributable to the Commercial Property. The Indi- vidual Parcel Improvement Costs shall be paid not later than when they are incurred or, if not so paid, they will be assessed against the Commercial Property as set forth in paragraph 3.3 below. The Allocation Assessment shall be paid as set forth in paragraph 3.3 below. 3.3. Bonds. The Commercial Property shall be assessed the Allocated Assessment and if not reimbursed within sixty days by the Commercial Owner, the Town shall sell municipal bonds with a term of at least 15 years for purposes of amortizing the Total Improvement Cost over the term of the bond and for funding or reimbursing the Total Improvement Cost. Thereafter the Commercial Property shall be assessed the Allocated Assessment (plus the Individual Parcel Improvement Costs, if the Commercial Owner does not pay them when they are incurred pursu- {00001480.DOC /9} 12113/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 5 - ant to paragraph 3.2 above) and interest on the Allocated Assessment (and the Individual Parcel Improvement Costs, if financed with the bonds) as required for repayment of the bonds. 3.4. Assessment Reallocation. Upon division or subdivision of the Commercial Property, the Town shall reallocate the assessment among the parcels in direct proportion to the benefit re- ceived by each parcel. 3.5. Consent to Assessment. The Commercial Owner hereby agrees to execute a standard improvement district waiver agreement prepared by the Town's bond counsel, in which the Commercial Owner (among other things) (i) consents to a levy of assessment for the Allocated Assessment; (ii) waives any and all objections to formation of an assessment district to imple- ment the terms of this Agreement; and (iii) agrees to take all steps necessary to levy and confirm assessments against the Commercial Property. Article 4. Developer-Funded Infrastructure Improvements 4.1. Tangerine Road and Street B Improvements. Before any certificates of occupancy are is- sued or any final inspections are approved for any use on any Commercial Parcel adjacent to Tangerine Road or the road identified on Exhibit A as "Street B" ("Street B"), the Commercial Owner shall complete construction of Street B and Tangerine Road from the intersection of Tan- gerine Farms Road to the intersection of Street B. The final location of Street B as shown on Exhibit A is conceptual, and the obligation to build Street B requires the construction of a road- way that is functionally equivalent to Street B as shown on Exhibit A. 4.2. Multi-Use Path along Tangerine Road. Concurrently with the construction of Tangerine Road as described in paragraph 4.1 above, the Commercial Owner shall construct a multi-use path along Tangerine Road, connecting to the multi-use path in Tangerine Farms Road and ex- tending to the south end of the Tangerine Road improvements as described in paragraph 4.1 above. The Owner shall extend the multi-use path from the south end of the Tangerine Road im- provements as described in paragraph 4.1 above to the Linear Park Land within 60 days after the Town substantially completes the trail connecting the Linear Park Land to the public park lo- cated on the property identified as "Park Block A" on the Gladden Farms Final Block Plat re- corded in the Pima County Recorder's office at Book 55 of Maps and Plats, Page 60. 4.3. Tangerine Farms Road/Tangerine Road Intersection Signal. When a traffic signal is deemed warranted by the Town following the construction of the Tangerine Road Extension and Street B, the Commercial Owner shall make payment to the Town the sum of $450,000 for the Town to design and construct a traffic signal at the Tangerine Farms Road/Tangerine Road inter- section. If the Town constructs Tangerine Farms Road pursuant to the provisions of Article 2 and Article 3, the Town shall install conduit required for future installation of this traffic signal as part of the Individual Parcel Improvement Costs paid by the Commercial Owner. The cost of the conduit will be deducted from the sum of $450,000 to be paid to the Town. When the signal con- struction is completed, the difference between the sum forward-funded to the Town to design and construct the traffic signal and the actual amount expended, including construction manage- ment and change orders, shall be immediately refunded to the Commercial Owner. No addi- tional contribution from the Commercial Owner shall be required for the design and construction of the traffic signal. 4.4. Other Road Improvements. Upon commencement of development activity adjacent to any public right-of-way, the Commercial Owner or the Owner shall provide improvements nec-d {00001480.DOC /9} 12/13/20052:34 PM TANGERINE COMMERCE PARK REAL ESTA TE EXCHANGE AND DEVELOPMENT AGREEMENT - 6- essary to accommodate that development activity in accordance with the Applicable Town Regu- lations. 4.5. Water. For a period of 15 years, the Town shall reserve sufficient capacity within water mains constructed as part of the Tangerine Farms Road Improvements to develop the Commer- cial Property as retail stores. 4.6. Sewer Service to the Commercial Property. The Commercial Owner shall pay all costs associated with providing sewer service to the extent necessary to serve the Commercial Prop- erty. 4.6.1. Sewer service for the Commercial Property is currently anticipated to occur by ex- tending sewer lines proposed to be installed in Gladden II to the Tangerine Farms Right-of- Way and constructing the Tangerine Farms Sewer Extension (see paragraph 3.1.5 above). Unless the Town first receives the notice described in subparagraph 4.6.2 below, when de- velopment proceeds in Gladden II, the Town will require the developer of Gladden II to in- stall sewer lines to the future north right-of-way line of Tangerine Farms Road at the south- ern boundary of Gladden II, provided that the Commercial Owner shall pay in advance to the party constructing the Gladden II sewer: 4.6.1.1. To the extent oversizing is required for the Commercial Property, the incre- mental additional cost of oversizing the Gladden II sewer to serve the Commercial Prop- erty, and 4.6.1.2. Any cost for the extension of the sewer beyond where it would be needed to serve residential development within Gladden II, and 4.6.1.3. Any other sewer costs reasonably imposed by Pima County Wastewater Management to serve the Commercial Property and that would not otherwise be incurred within Gladden II. 4.6.2. If the sewer lines in Gladden II have not yet been oversized (see subpara- graph 4.6.1 above) and the Commercial Owner provides written notice to the Town that an alternate method for obtaining sewer service on the Commercial Property has been secured, subparagraph 4.6.1 above shall not apply and any portion of the Tangerine Farms Sewer Ex- tension that has not been constructed and is not required to serve the Commercial Property shall be removed from the Tangerine Farms Road Improvements at the cost of the Commer- cialOwner. 4.7. Impact Fees Credit. The Town shall credit the following costs paid by the Commercial Owner toward any transportation related assessments or impact fees levied in the future on the Commercial Property and shall impose no arterial roadway capacity transportation improvement requirements except as provided in the Specific Plan and in this Agreement: Construction costs incurred for the Allocated Assessment, Tangerine Farms Road and Tangerine Road. Arterial roadway capacity transportation requirements include the construction or expansion of a major Town roadway, such as Tangerine Road, Tangerine Farms Road or the 1-10 frontage road and interchange, but do not include access improvements necessary to support the proposed devel- opment of the Commercial Property, such as acceleration and deceleration lanes and signaliza- tion or other traffic control features of access roadways. {00001480.DOC / 9} 12/13/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 7 - Article 5. Resource Fee Commencing upon approval of the Specific Plan, the owner of the Resource Property shall pay the Resource Fee on a quarterly basis. The Town shall have the right to audit the records related to the Resource Fee in the same manner as sales tax payable to the Town. If the Town levies a similar fee related to extraction of sand and gravel, the Resource Fee shall be credited against any such fees. Article 6. Storm Water Inflows The Owner shall allow all of the Storm Water Inflows to be directed into the Retention Basin. The Owner at its own expense may direct the Storm Water Inflows to other portions of the Re- source Extraction Property as long as the change continues to provide the capacity needed to accommodate the Storm Water Inflows. Before making any such changes, the Owner shall sub- mit plans of the proposed changes prepared by a registered professional engineer for review and approval by the Town. The Owner hereby grants to the Town a perpetual easement over, upon and through the Resource Extraction Property for the Storm Water Inflows to be directed into and retained in the Retention Basin and covenants that (i) the volume of the Retention Basin shall not be modified in a manner that does not accommodate the Storm Water Inflows; (ii) the perimeter slopes of the Retention Basin shall be maintained in a manner that does not impact or encroach upon the adjoining public right-of-way and Commercial Property and where required the maintenance shall include providing concrete or other structural measures to allow the Storm Water Inflows into the Retention Basin without undue slope degradation; and (iii) any water re- tained within the Retention Basin shall be treated to prevent mosquito infestation. The Town and any successor owner to the Commercial Property are hereby given authority to enforce these covenants and are granted an easement to implement them if the Owner fails to comply within a reasonable time period after notice from the enforcing party (force majeure or other unavoidable delay excepted) and any reasonable expense incurred by the enforcing party shall be promptly reimbursed by the Owner. Article 7. Development Plans and Subdivision Plats 7.1. Development Plan and Subdivision Plat Review. The Property shall be developed in a manner consistent with the Applicable Town Regulations, which together establish the basic land uses, and the uses, intensities and development regulations that apply to the land uses authorized for the Property. Upon the Owner's and/or Commercial Owner's compliance with the Applica- ble Town Regulations, the Town agrees to issue such permits or approvals for the Property as may be requested by the Owner and/or Commercial Owner. 7.2. Archaeological/Historic Resources. By way of drawing special attention, and not as a limitation on the other Applicable Town Regulations, the Owner and Commercial Owner ac- knowledge that the development of the Property shall meet all Town requirements set forth in Title 2 and Title 20 of the Marana Development Code related to Archeological and Historic Re- sources. Article 8. Levee Fee 8.1. Levee Fee for the Commercial Property. As a condition of approval of a development plan, subdivision plat or building permit for a Commercial Parcel, the Commercial Owner shall pay the Levee Fee of $500 per acre to the Town for acreage for which the development plan, {00001480.DOC / 9} 12/13/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 8 - subdivision plat or building permit is sought except to the extent the Levee Fee was previously paid for that acreage. 8.2. Levee Fee for the Resource Extraction Property. Prior to issuance of a building permit for any structure or use on a Resource Extraction Parcel that is not associated with resource ex- traction, the Owner shall pay the Levee Fee of $500 per acre to the Town for the entire Resource Extraction Parcel for which the building permit is sought. The Levee Fee shall not be applicable to resource extraction activities on the Resource Extraction Property. Article 9. Cooperation and Alternative Dispute Resolution 9.1. Appointment of Representatives. To further the commitment of the Parties to cooperate in the progress of the Development, the Town, Owner and Commercial Owner each shall desig- nate and appoint a representative to act as a liaison between the Town and its various depart- ments and the relevant owner. The initial representative for the Town (the "Town Representa- tive") shall be Assistant Town Manager Gilbert Davidson or the Assistant Town Manager who oversees the Planning Department. The initial representative for the Commercial Owner shall be David Mehl or a replacement to be selected by the Commercial Owner. The initial representa- tive for Owner shall be Steve Knudsen. The representatives shall be available at all reasonable times to discuss and review the performance of the Parties to this Agreement and the develop- ment of the Property. 9.2. Timing. The Town acknowledges the necessity for prompt and complete review by the Town of all plans and other materials (the "Submitted Materials") submitted by the Owner or Commercial Owner to the Town under this Agreement or pursuant to any zoning procedure, per- mit procedure, or other governmental procedure pertaining to the development of the Property and agrees to use its best efforts to accomplish prompt and complete review of the Submitted Materials whenever possible. 9.3. Default; Remedies. If either Party defaults (the "Defaulting Party") with respect to any of that Party's obligations under this Agreement, the other Party (the "Non-Defaulting Party") shall be entitled to give written notice in the manner prescribed in paragraph 11.1 to the Default- ing Party, stating the nature of the default claimed and demanding that the default be corrected. The Defaulting Party shall then have (i) twenty days from the date of the notice within which to correct the default if it can reasonably be corrected by the payment of money, or (ii) sixty days from the date of the notice to cure the default if action other than the payment of money is rea- sonably required, or if the non-monetary default cannot reasonably be cured within sixty days, then such longer period as may be reasonably required, provided and so long as the cure is promptly commenced within sixty days and thereafter diligently prosecuted to completion. If any default is not cured within the applicable time period set forth in this paragraph, then the Non-Defaulting Party shall be entitled to begin the mediation and arbitration proceedings set forth in paragraphs 9.4 and 9.5 below. The Parties agree that due to the size, nature and scope of the anticipated development of the Property, and due to the fact that it may not be practical or possible to restore the Property to its condition prior to Owner's and Commercial Owner's de- velopment 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 enforcement of this Agreement. This paragraph shall not limit any other rights, remedies, or causes of action that either party may have at law or in equity. {00001480.DOC /9} 12113/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 9 - 9.4. Mediation. If there is a dispute under this Agreement which the Parties cannot resolve among themselves, the Parties agree that there shall be a twenty-one day moratorium on arbitra- tion 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 media- tion rules of the American Arbitration Association. The matter in dispute shall be submitted to a mediator mutually selected by the Owner, the Commercial Owner and the Town. If the Parties cannot agree upon the selection of a mediator within seven days, then within three days thereaf- ter the Town shall (on its behalf and on behalf of the Owner and the Commercial Owner) 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 be neutral and 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 mediating Parties. The results of the mediation shall be nonbinding on the Parties, and any Party shall be free to initiate arbitration after the moratorium period. 9.5. Arbitration. If mediation (paragraph 9.4 above) fails to result in resolution ofthe dispute, the dispute, controversy, claim or cause of action arising out of or relating to this Agreement shall be settled by submission of the matter by all Parties to binding arbitration in accordance with the rules of the American Arbitration Association and the Arizona Uniform Arbitration Act, A.R.S. S 12-501 et seq., and judgment upon the award rendered by the arbitrator(s) may be en- tered in a court having jurisdiction. Article 10. Protected Development Rights To establish legally protected rights for the development of the Property in a manner consis- tent with this Agreement and the development regulations that now apply to the Property and to ensure reasonable certainty, stability and fairness to the Owner and the Town over the term of this Agreement, the Owner and the Town agree that the Specific Plan, as amended by this Agreement, shall remain in effect and shall not be changed during the term of this Agreement without the agreement of the owner or owners of the particular area(s) affected by the change. Nothing in this Article shall affect the Town's authority to adopt ordinances or regulations in furtherance of the public health, safety and welfare of the Town that are of general application; that is, they apply to all similarly situated properties throughout the Town provided they do not amend this Agreement or the Specific Plan. Article 11. General Terms and Conditions 11.1. Manner of Serving. All notices, filings, consents, approvals and other communications provided for in or given in connection with this Agreement shall be validly given, filed, made, transmitted or served if in writing and delivered personally or sent by registered or certified United States mail, postage prepaid, if to (or to such other addresses as any Party may from time to time designate in writing and deliver in a like manner): To the Town: TOWN OF MARANA Town Manager 11555 W. Civic Center Drive Bldg A3 Marana, Arizona 85653 {00001480.DOC /9} 12113/20052:34 PM TANGERINE COMMERCE PARK REAL ESTA TE EXCHANGE AND DEVELOPMENT AGREEMENT - 10 - With a copy to: TOWN OF MARANA Town Attorney 11555 W. Civic Center Drive Bldg A3 Marana, Arizona 85653 To the Commercial Owner: COTTONWOOD PROPERTIES, INC. 3567 E Sunrise Drive Suite 219 Tucson, Arizona 85718 To the Owner: CEMEX, INC. Mr. Steve Knudson 420 N. 44th St., Suite 250 Phoenix, Arizona 85008 With a Copy to: CEMEX, INC. General Counsel 840 Gessner, Suite 1400 Houston, Texas 77024 11.2. Effective Date. This Agreement shall become effective upon the latest of the following (the "Effective Date"): (i) the date of execution by all of the Parties, (ii) the effective date of the Town Council resolution approving and authorizing the execution of this Agreement; or (iii) the effective date of the Specific Plan. 11.3. Term. The term of this Agreement shall begin on the Effective Date and, unless sooner terminated by the mutual consent ofthe Parties, shall automatically terminate and shall thereafter be void for all purposes on the twentieth anniversary of the Effective Date. If the Parties deter- mine that a longer period is necessary for any reason, the term of this Agreement may be ex- tended by written agreement of the Parties. 11.4. Waiver. No delay in exercising any right or remedy shall constitute a waiver of that right or remedy, and no waiver by the Town, the Owner or the Commercial Owner of the breach 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. 11.5. Attorney's Fees. If any Party brings a lawsuit against any other Party to enforce any of the terms, covenants or conditions of this Agreement, or by reason of any breach or default of this Agreement, the prevailing Party shall be paid all reasonable costs and reasonable attorneys' fees by the other Party, in an amount determined by the court and not by the jury. Nothing in the use of the word "lawsuit" in the preceding sentence shall constitute a waiver of paragraph 9.5, requiring disputes to be resolved by binding arbitration. 11.6. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The signature pages from one or more counterparts may be removed from such counterparts and such signature pages all attached to a single instrument so that the signatures of all Parties may be physically attached to a single document. {00001480.DOC /9} 12113120052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 11 - 11.7. Headings and Recitals. The descriptive headings of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provi- sions of this Agreement. The Recitals set forth at the beginning of this Agreement are hereby acknowledged, confirmed to be accurate and incorporated here. 11.8. Exhibits. Any exhibit attached to this Agreement shall be deemed to have been incor- porated in this Agreement by reference with the same force and effect as if fully set forth in the body of this Agreement. 11.9. Further Acts. Each of the Parties shall execute and deliver all easements, covenants and documents and perform all acts as reasonably necessary, from time to time, to carry out the matter contemplated by this Agreement. Without limiting the generality of the foregoing, the Town shall cooperate in good faith and process promptly any requests and applications for plat or permit approvals or revisions, and other necessary approvals relating to the development of the Property by the Owner, Commercial Owner and their successors. 11.10. Time Essence. Time is of the essence for purposes of this Agreement. 11.11. Successors. All of the provisions of this Agreement shall inure to the benefit of and be binding upon the successors, assigns and legal representative of the Parties. Unless and until the Town consents to an assignment of rights and obligations under this Agreement, the Town may enforce the obligations of the Owner and the Commercial Owner under this Agreement against the predecessor and successor in interest, the assignor and assignee, and the principal and legal representative. If there is a complete assignment of all rights and obligations of the Commercial Owner or Owner under this Agreement and the Town approves the assignment, the liability of the assigning party under this Agreement shall terminate effective upon the assumption of those liabilities by the assignee of the Commercial Owner or Owner. The Town hereby consents to the assignment of the rights and obligations of the Commercial Owner under this Agreement if the Commercial Property is sold to an entity managed by Cottonwood Properties and the Parties hereby acknowledge that such future owner shall have the rights and obligations associated with the Commercial Property under this Agreement. The Town understands that the Owner may cre- ate one or more entities or subsidiaries owned or controlled by the Owner for purposes of carry- ing out the development ofthe Property as contemplated in this Agreement, and the Town's con- sent to the Owner's assignment of its rights under this Agreement to such entities or subsidiaries shall not be reasonably withheld, delayed or conditioned. The Town may not unreasonably with- hold, delay or condition its approval of assignment under this paragraph. 11.12. No Partnership and Third Parties. It is not intended by this Agreement to, and nothing contained in this Agreement shall, create any partnership, joint venture or other arrangement between the Owner, Commercial Owner and the Town. No term or provision of this Agreement is intended to, or shall be for the benefit of any person, firm, organization or corporation not a party to this Agreement, and no such other person, firm, organization or corporation shall have any right or cause of action under this Agreement except as expressly provided in this Agree- ment. 11.13. Other Instruments. Each Party shall, promptly upon the request of the other, have ac- knowledged and delivered to the other any and all further instruments and assurances reasonably request or appropriate to evidence or give effect to the provisions of this Agreement. {00001480.DOC /9} 12113/20052:34 PM TANGERINE COMMERCE PARK REAL ESTA TE EXCHANGE AND DEVELOPMENT AGREEMENT - 12 - 11.14. Imposition of Duty by Law. This Agreement does not relieve any Party of any obliga- tion or responsibility imposed upon it by law. 11.15. Entire Agreement. This Agreement constitutes the entire agreement between the Par- ties pertaining to the subject matter of this Agreement. All prior and contemporaneous agree- ments, representation and understanding of the Parties, oral or written, are hereby superseded and merged in this Agreement. 11.16. Amendments to Agreement. No change or addition shall be made to this Agreement except by a written amendment executed by the Parties. The Parties agree to cooperate and in good faith pursue any amendments to this Agreement that are reasonably necessary to accom- plish the goals expressed in the Specific Plan as amended by this Agreement. Within ten days after any amendment to this Agreement, it shall be recorded in the office of the Pima County Recorder by and at the expense ofthe Party requesting the amendment. 11.17. Names and Plans. The Owner or Commercial Owner as relevant, shall be the sole owner of all names, titles, plans, drawings, specifications, ideas, programs, ideas, designs, and work products of every nature at any time developed, formulated or prepared by or at the in- stance of such party in connection with the Property or any plans; provided, however, that in connection with any conveyance of portions of the infrastructure as provided in 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. 11.18. Good Standing: Authority. The Owner represents and warrants to the Town and Com- mercial Owner that it is duly formed and validly existing under the laws of Louisiana and is au- thorized to do business in the state of Arizona. The Town represents and warrants to the Owner and Commercial Owner that it is an Arizona municipal corporation with authority to enter into this Agreement under applicable state laws. The Commercial Owner represents and warrants to the Town and Owner that it is duly formed and validly existing under the laws of Arizona and is authorized to do business in the state of Arizona. 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. 11.19. Severability. If any provision of this Agreement is declared void or unenforceable, it shall be severed from the remainder of this Agreement, which shall otherwise remain in full force and effect. If a law or court order prohibits or excuses the Town from undertaking any contractual commitment to perform any act under this Agreement, this Agreement shall remain in full force and effect, but the provision requiring the act shall be deemed to permit the Town to act at its discretion, and if the Town fails to act, the Owner shall be entitled to terminate this Agreement. 11.20. 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 pre- ceding sentence shall constitute a waiver of paragraph 9.5, requiring disputes to be resolved by binding arbitration. 11.21. Interpretation. This Agreement has been negotiated by the Town, the Owner and the Commercial Owner, 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. {00001480.DOC /9} 12113120052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 13 - 11.22. Recordation. The Town shall record this Agreement in its entirety in the office of the Pima County Recorder no later than ten days after the Effective Date. 11.23. No Owner Representations. Except as specifically set forth in this Agreement, noth- ing contained in this Agreement shall be deemed to obligate the Town, the Commercial Owner, or the Owner to complete any part or all of the development of the Property. 11.24. 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. 11.25. Force Majeure. If any 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 or perform such covenant or condition shall not constitute a default under this Agreement so long as such Party shall use its best effort to remedy with all reasonable dispatch the event or condition caus- ing such inability and such event or condition can be cured within a reasonable amount of time. "Force majeure," as used in this paragraph, means any condition or event not reasonably within the control of such party, induding without limitation, "acts of God," strikes, lock-outs, or other disturbances of employer/employee relations; acts of public enemies; orders or restraints of any kind of government of the United States or any state thereof or any of their departments, agen- cies, or officials, or of any civil or military authority; insurrection; civil disturbances; riots; epi- demics; landslides; lightning; earthquakes; subsidence; fires; hurricanes; storms; droughts; floods; arrests, restraints of government and of people; explosions; and partial or entire failure of utilities. Failure to settle strikes, lock-outs and other disturbances of employer/employee rela- tions or to settle legal or administrative proceedings by acceding to the demands of the opposing Party or Parties, in either case when such course is in the judgment of and unfavorable to a Party shall not constitute failure to use its best efforts to remedy such a condition. 11.26. Conflict ofInterest. This Agreement is subject to A.R.S. ~ 38-511, which provides for cancellation of contracts in certain instances involving conflicts of interest. 11.27. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date (see paragraph 11.2 above). TOWN: THE TOWN OF MARANA, an Arizona munici- pal corporation OWNER: CEMEX INC., a Louisiana corporation By: Ed Honea, Mayor By: [Print Name & Title] ATTEST: Jocelyn C. Bronson, Clerk COMMERCIAL OWNER: COTTONWOOD PROPERTIES, INC. ApPROVED AS TO FORM: By: [Print Name & Title] Frank Cassidy, Town Attorney {00001480.DOC /9} 12113/20052:34 PM TANGERINE COMMERCE PARK REAL ESTA TE EXCHANGE AND DEVELOPMENT AGREEMENT - 14 - STATE OF TEXAS ) ss. County of Harris ) The foregoing instrument was , as behalf of the corporation. acknowledged before me on by of CEMEX, INC., a Louisiana corporation, on My commission expires: Notary Public STATE OF ARIZONA) ss. County of Pima ) The foregoing instrument was acknowledged before me on by , as of COTTONWOOD PROPERTIES, INC., an Arizona corporation, on behalf of the corporation. My commission expires: Notary Public {OOOOI480.DOC /9} 12/13/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 15 - LIST OF EXHffiITS Exhibit Description A Overview map of the Property B Legal description of the Resource Extraction Property, consisting of Resource Extrac- tion Parcels A through C C Legal description of the Commercial Property, consisting of Commercial Parcels A through D D Legal description of the Linear Park Land E Legal description ofthe Tangerine Farms Right-of-Way F Legal description of the Street A Right-of-Way G Legal description of the Tangerine Road Right-of-Way H Legal description of the Drainage Easement I General depiction ofthe Tangerine Farms Road Improvements within the Property {00001480.DOC /9} 12113/20052:34 PM TANGERINE COMMERCE PARK REAL ESTATE EXCHANGE AND DEVELOPMENT AGREEMENT - 16 -