HomeMy WebLinkAboutResolution 2014-014 removing the spare time entertainment development agreementMARANA RESOLUTION NO. 2014-014
RELATING TO DEVELOPMENT; AUTHORIZING TOWN STAFF TO EXECUTE AND
RECORD ANY DOCUMENTATION NECESSARY TO REMOVE THE 2003
DEVELOPMENT AGREEMENT BETWEEN THE TOWN OF MARANA AND SPARE TIME
FAMILY ENTERTAINMENT CENTER, L.L.C. FROM THE AFFECTED PROPERTY'S
TITLE
WHEREAS the Town and Spare Time Family Entertainment Center, L.L.C., entered into
a development agreement recorded in the Pima County Recorder's office on March 17, 2003 at
Docket 12008, Page 1780 and referred to in this Resolution as the `Bedroxx Development
Agreement"; and
WHEREAS the Bedroxx Development Agreement facilitated the development of what
has become known as the Bedroxx Family Entertainment Center located at 7061 North Camino
Martin and 4385 West Ina Road in Marana, Pima County Tax Identification Number
101-OS-007D (the `Bedroxx Property"); and
WHEREAS the Town of Marana agreed in the Bedroxx Development Agreement to
reimburse Spare Time Family Entertainment Center, L.L.C. any sales tax generated from the
Bedroxx Property in excess of $33,000 per fiscal year for ten fiscal years ending June 30, 2013,
and not exceeding the cost of the remodeling and acquisition and installation of the equipment
listed in the agreement; and
WHEREAS Spare Time Family Entertainment Center, L.L.C. agreed in the Bedroxx
Development Agreement to provide one dollar of `Bntertainment Credits" for use by the Town
of Marana's Parks and Recreation Department or in conjunction with public schools in exchange
for each dollar of refunded sales tax; and
WHEREAS the Town of Marana provided a cumulative total of $95,751.36 in refunded
sales tax to Spare Time Family Entertainment Center, L.L.C., under the Bedroxx Development
Agreement; and
WHEREAS the Town of Marana has redeemed a total of $49,747.46 in Entertainment
Credits under the Bedroxx Development Agreement, for various activities including after prom
parties, winter camp, senior bowling, and Special Olympics; and
WHEREAS the Town of Marana has a balance of $46,003.90 in unused Entertainment
Credits under the Bedroxx Development Agreement; and
Resolution No. 2014-014 - 1- 2/5/2014 1:55 PM FJC
WHEREAS Spare Time Family Entertainment Center, L.L.C., which held only a
leasehold interest in the Bedroxx Property, filed for Chapter 11 bankruptcy on November 5, 2008
and had its plan of reorganization confirmed on October 2, 2010; and
WHEREAS Bedrock Ina LLC purchased the Bedroxx Property on May 28, 2004; and
WHEREAS neither Bedrock Ina LLC nor the previous owner of the Bedroxx Property
signed the Bedroxx Development Agreement; and
WHEREAS Bedrock Ina LLC is in the process of selling the Bedroxx Property, and the
title report includes reference to the Bedroxx Development Agreement; and
WHEREAS Bedrock Ina LLC contends that it has no obligations under the Bedroxx
Development Agreement for reasons including (i) neither Bedrock Ina LLC nor its predecessor
in interest is a party to the agreement; (ii) Spare Time Family Entertainment Center, L.L.C. filed
bankruptcy, the Town did not file a claim, and the debtor's obligations were discharged with the
confirmation of its plan of reorganization; and (iii) a final certificate of occupancy was not
obtained prior to January 1, 2004 as required under section 1.1 of the Bedroxx Development
Agreement, rendering it null and void; and
WHEREAS the obligations under the Bedroxx Development Agreement could possibly
be enforceable against Spare Time Family Entertainment Center, L.L.C. or the current owner of
the Bedroxx Property for reasons including (i) the refunded sales tax paid by the Town of
Marana was used for improvements that remain in use by the current owner of the Bedroxx
Property; (ii) the Bedroxx Development Agreement is binding on, among others, "heirs,
successors or assigns"; (iii) the Bedroxx Development Agreement was of record in the office of
the Pima County Recorder at the time Bedrock Ina LLC purchased the property; (iv) the Town of
Marana was not listed as a creditor in the bankruptcy as required by 11 U.S.C. § 521(a)(1)(A),
was not notified of the bankruptcy, and was arguably not discharged per 11 U.S.C.
§ 523(a)(3)(A); and (v) although the certificate of occupancy was not issued until May 7, 2004,
the parties waived any defect by continuing to perform under and honor the terms of the Bedroxx
Development Agreement; and
WHEREAS Town staff has recommended that the Town of Marana clear the Bedroxx
Development Agreement from the Bedroxx Property title for reasons including (i) the cost to
continue arguing about the issue, in light of the relatively small amount in contention; (ii) the
possible validity of one or more of the contentions of Bedrock Ina LLC; and (iii) the desire to
support reinvestment in the Town of Marana and to reap the sales tax and other economic
development benefits of that reinvestment; and
Resolution No. 2014-014 - 2- 2/5/2014 1:55 PM FJC
WHEREAS the Mayor and Council find that authorizing Town staff to proceed as
authorized by this Resolution is in the best interest of the Town and its citizens.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE
TOWN OF MARANA, ARIZONA, that the Town Manager is authorized to execute and record
any documentation necessary to remove the 2003 Development Agreement between the Town of
Marana and Spare Time Family Entertainment Center, L.L.C. from the affected property's title.
PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF
MARANA, ARIZONA, this 18th day of February, 2014.
f
���
Mayor Ed Honea
ATTEST:
, ,
�.�v/ %�� .�. ! i ,,
,
,� - �� C • � •
Resolution No. 2014-014 - 3- 2/5/2014 I:55 PM FJC