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HomeMy WebLinkAboutResolution 2024-013 Approving and Authorizing the Mayor to Execute Agreements for Construction of Drainage Facilities under private contract between the Town and Mandarina Holdings, LLC MARANA RESOLUTION NO. 2024-013 RELATING TO UTILITIES; APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE AGREEMENTS FOR CONSTRUCTION OF DRAINAGE FACILITIES UNDER PRIVATE CONTRACT BETWEEN THE TOWN AND MANDARINA HOLDINGS, LLC WHEREAS the Mayor and Council of the Town of Marana adopted Ordinance No. 2009.02 on February 17, 2009, approving a rezoning of approximately 342 acres of land located north and northwest of the Interstate 10 and Tangerine Road traffic interchange to "F - Specific Plan" creating the Mandarina Specific Plan ("Mandarina"); and WHEREAS the Town and the then-owner of Mandarina,Mandarina,LLC,entered into the"Mandarina Development Agreement," recorded in the Pima County Recorder's office on December 4, 2020, at Sequence 20203390091; and WHEREAS the current beneficial owner of Mandarina,Mandarina Holdings,LLC (the "Developer"), is the successor in interest to Mandarina LLC; and WHEREAS the Town and the Developer entered into the "First Amendment to Mandarina Development Agreement," recorded in the Pima County Recorder's office on January 26, 2024, at Sequence 20240260136 (collectively, the Mandarina Development Agreement and the First Amendment to Mandarina Development Agreement are referred to herein as the "Mandarina DA"); and WHEREAS the Mandarina DA provides that the Developer may construct certain oversized public facilities, sized to include elements and capacity sufficient to serve Mandarina and other benefiting properties, and to that extent the Town and the Developer may provide for partial reimbursement to the Developer by non-participating properties by designating the facilities as "protected facilities" in accordance with Marana Town Code section 14-4-3; and WHEREAS the Mandarina DA further provides that the Developer shall initiate the protected facility designation process by signing and tendering to the Town an "Agreement for Construction of Facilities under Private Contract" for each facility; and WHEREAS the Mandarina DA further provides that after providing notice to benefited properties as provided in Marana Town Code section 14-4-5, Town staff will present the agreements for construction to Council; and 1 Marana Resolution No. 2024-013 WHEREAS the Mandarina DA further provides that upon approval by Council, the Agreement for Construction of Facilities under Private Contract for the Regional Channel will result in the establishment of the Mandarina Regional Channel Oversizing Recovery Charge;the Agreement for Construction of Facilities under Private Contract for the North Channel will result in the establishment of the Mandarina North Channel Oversizing Recovery Charge; and the Agreement for Construction of Facilities under Private Contract for the Detention Basin will result in the establishment of the Mandarina Detention Basin Oversizing Recovery Charge; and WHEREAS the Developer has tendered to the Town the Agreements for Construction of Facilities under Private Contract for the Regional Channel, North Channel, and Detention Basin (collectively, the "Agreements for Construction of Drainage Facilities under Private Contract"); and WHEREAS Town staff has provided 30-day notice to potentially benefited properties regarding the possible designation of the Mandarina drainage facilities as protected facilities and the possible adoption of an oversizing recovery charge, as provided in Marana Town Code section 14-4-5; and WHEREAS the Mayor and Council find that the terms and conditions of the Agreements for Construction of Drainage Facilities under Private Contract 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 Agreement for Construction of Facilities under Private Contract for the Regional Channel establishing the Mandarina Regional Channel Oversizing Recovery Charge,the Agreement for Construction of Facilities under Private Contract for the North Channel establishing the Mandarina North Channel Oversizing Recovery Charge, and the Agreement for Construction of Facilities under Private Contract for the Detention Basin establishing the Mandarina Detention Basin Oversizing Recovery Charge, attached to and incorporated by this reference in this resolution as Exhibits A,B,and C,respectively,are hereby approved,the Mayor is hereby authorized and directed to sign them for and on behalf of the Town of Marana, and the Towri 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 agreements. 2 Marana Resolution No. 2024-013 PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 6th day of February, 2024. e/A Mayor Ed Honea ATTEST: APPROVED AS TO FORM: J David L. Udall, Town Clerk Jane airall,Town Attorney MARANA AZ ESTABLISHED 1977 3 Marana Resolution No. 2024-013 TOWN OF MARANA AGREEMENT FOR CONSTRUCTION OF DRAINAGE FACILITIES UNDER PRIVATE CONTRACT Mandarina Regional Channel THIS AGREEMENT(this"Agreement") is entered into by and between the TOWN OF MA- RANA,an Arizona municipal corporation(the"Town"),and MANDARINA,HOLDINGS LLC, an Arizona limited liability company(the"Developer").The Town and the Developer are sometimes collectively referred to as the "Parties," each of which is sometimes individu- ally referred to as a"Party." RECITALS A. This Agreement is entered into and authorized pursuant to Title 14 of the Marana Town Code as it may be amended from time to time ("Marana Town Code Title 14"). B. The Developer desires for the Town to issue flood control use permits for develop- ment on the land described and depicted in the Mandarina Specific Plan, adopted by Marana Ordinance No. 2009.02,recorded in the Pima County Recorder's office at Docket 13499, Page 8 (Sequence 20090340005), and amended by administrative amendments dated October 30, 2019, and November 15, 2022, whose land area is referred to in this Agreement as the "Subject Property." C. The Developer is the owner of the "Subject Property." Title to some of the blocks of the Subject Property is held by TITLE SECURITY AGENCY,LLC,a Delaware limited liabil- ity company as Trustee under trust number 202308 ("TITLE SECURITY 202308"), for the benefit of Developer, as the sole beneficiary. D. As a condition of receiving flood control use permits from the Town for the Subject Property, the Developer agrees to install those certain drainage infrastructure improve- ments (the"Developer-Installed Facility") in accordance with the required plans, specifi- cations,and materials as outlined and depicted in the Plan for Mandarina LOMR Drainage Channel,Plan No. ENG2103-015,sealed by Psomas on May 17,2021 and approved by the Marana Town Engineer on May 28,2021 (the"Facility Plan"),which is on file in the office of the Town of Marana Development Engineering Department. The Developer-Installed Facility is referred to as the "LOMR Drainage Channel" in the Facility Plan. E. The Town and MANDARINA, LLC, a Colorado limited liability company, entered into the "MANDARINA DEVELOPMENT AGREEMENT," recorded in the Pima County Re- corder's office on December 4, 2020, at Sequence 20203390091. F. The Developer is the successor in interest to Mandarina,LLC. MANDARINA REGIONAL CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -1 - G. The Town and the Developer entered into the "FIRST AMENDMENT TO MANDARINA DEVELOPMENT AGREEMENT," recorded in the Pima County Recorder's Office on , 2024, at Sequence 2024_p Z (o D ( 3 ( . The Mandarina De- velopment Agreement and the First Amendment to Mandarina Development Agreement are referred to collectively in this Agreement as the "Mandarina Development Agree- ment." H. The Mandarina Development Agreement governs development of the Subject Property and anticipates the Developer's installation of the Developer-Installed Facility, which is referred to in the Mandarina Development Agreement as the "Regional Chan- nel." I. The Developer-Installed Facility includes elements and capacity sufficient to pro- vide drainage to other currently vacant Town properties, and to that extent the Parties wish to provide for partial reimbursement to the Developer in accordance with Marana Town Code section 14-4-3 (capacity requirements). J. The total cost of the Developer-Installed Facility is $3,315,403, which is the sum of the construction cost for the Developer-Installed Facility of$2,805,463 and the total land value of $509,940 (Subject Property land area to be used for the Developer-Installed Fa- cility is 16.998 acres, valued at$30,000 per acre). K. The Developer-Installed Facility has a capacity of 3207 cubic feet per second. The Subject Property is estimated to discharge 542 cubic feet per second, leaving excess ca- pacity in the Developer-Installed Facility of 2665 cubic feet per second. L. The Developer desires that the Town take ownership of,operate,and service the De- veloper-Installed Facility. M. The Town is willing to accept the Developer-Installed Facility and permit it to be connected to the system of Town-maintained drainage facilities provided it meets Town standards and the work is done in accordance with Town requirements. AGREEMENT NOW, THEREFORE, in consideration of the foregoing premises and the mutual cove- nants set forth in this Agreement,the Parties hereby agree as follows: 1. The Developer's representation of ownership. By entering into this Agreement, the Developer represents that it is the sole beneficiary of TITLE SECURITY 202308 and is entitled to enter into this Agreement. 2. The Developer-Installed Facility 2.1. Developer installation of the Developer-Installed Facility. The Developer has designed and installed, at the Developer's own expense (subject to the reimbursement provisions of this Agreement), the drainage infrastructure improvements as depicted in the Facility Plan. The drainage infrastructure improvements depicted on the Facility Plan as the "LOMR Drainage Channel" are referred to in this Agreement as the"Developer-Installed Facility," and shall conform to the design standards of the Pima County Regional Flood MANDARINA REGIONAL CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -2- Control District and the Town of Marana Town Code Title 14 and special specifications and details as approved by the Town and by this reference made a part of this Agreement. The Facility Plan shall include a plan note identifying the Developer-Installed Facility as a new drainage facility and shall show any and all alterations to the existing drainage system. Construction and installation of the Developer-Installed Facility in accordance with the Facility Plan, including without limitation all labor, materials, equipment, sup- plies, and tools required for the construction and installation, is referred to in this Agree- ment as the "Work." 2.2. Competitive bids. As a condition of and prerequisite to receiving any reimburse- ment under this Agreement, the Developer went through the competitive bidding pro- cess for the Work in compliance with Title 34 of the Arizona Revised Statutes. 2.3. Work by licensed contractor. The Work was performed by a contractor properly li- censed by the State of Arizona as determined by the Arizona Registrar of Contractors. In addition to any other contractor's license classifications required by the Arizona Registrar of Contractors,the contractor held contractor's license classifications A and A-12. 2.4. Developer-Installed Facility acceptance by Town. No flood plain use permits will be issued in reliance on the Developer-Installed Facility,and the Developer-Installed Facility will not be accepted for maintenance as part of the Towri s drainage system, until the Developer-Installed Facility has been accepted by the Town in accordance with Marana Town Code Title 14. 2.5. Developer's certification. Execution of this Agreement certifies that the Developer has reviewed the Facility Plan and all other specifications applicable to the Work. 2.6. Termination for lack of Work. Approval of the Facility Plan shall lapse and this Agreement shall terminate if the Work is discontinued for a period of one year. 2.7. Oversizing Recovery Charge. The Parties have determined that the Developer-In- stalled Facility will have excess capacity of 2665 cubic feet per second as a result of and upon completion of the Work and after the discharge of 542 cubic feet per second from the Subject Property. Consequently, pursuant to Marana Town Code section 14-4-3 (C), the Town hereby establishes an "oversizing recovery charge" of$1,033.80 per cubic foot per second for drainage discharges to the Regional Channel. For purposes of this para- graph, all of the following apply: 2.7.1. The oversizing recovery charge shall be payable only until the Developer- Installed Facility reaches its design capacity; currently anticipated to be for an addi- tional 2665 cubic feet per second discharges to the Developer-Installed Facility. 2.7.2. Based on the oversizing recovery charge of$1,033.80 per cubic foot per sec- ond, the Parties' current estimate of the total potential reimbursement through over- sizing recovery charges for the Developer-Installed Facility is $2,755,077.00. MANDARINA REGIONAL CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -3- 2.7.3. The oversizing recovery charge payments for development benefitted by the Developer-Installed Facility shall be payable as described in the Mandarina Develop- ment Agreement. 2.7.4. The Developer shall have a beneficial ownership interest in the Developer- Installed Facility sufficient to prohibit drainage discharge into it from newly devel- oped properties unless and until the oversizing recovery charge is paid. 2.7.5. The drainage discharge into the Developer-Installed Facility from newly de- veloped properties shall be determined by a drainage report prepared by a licensed civil engineer and approved by the Town Engineer. 2.7.6. The 542 cubic feet per second drainage discharge from the Subject Property has been calculated assuming certain development on the Subject Property. If the ac- tual development of the Subject Property results in a different drainage discharge from the Subject Property,the remaining available capacity of the Developer-Installed Facility, and the total potential reimbursement through oversizing recovery charges, shall be re-calculated accordingly. 2.7.7. The Town makes no guarantee that the Developer will receive full reim- bursement of the Developer's cost of completing the Work. 3. Engineering and Inspection 3.1. Registered civil engineer. The Developer employed a registered Civil Engineer to design, lay out, establish control lines for and certify the layout of the Work according to the Facility Plan. 3.2. Town inspector's authority. Any inspector authorized by the Town shall have full inspection authority over the Work. 3.3. Inspection provisions. The Developer shall furnish the Town's inspector with all facilities reasonably necessary to inspect the Work. The Work shall be subject to Town inspection at all times. Defective work shall be corrected in a manner satisfactory to the Town's inspector. Inspection by the Town is for the purpose of ensuring compliance with plans and specifications only. The Town makes no guarantee as to the safety or engineer- ing soundness of plans prepared by the Developer or any contractor. 3.4. Payment of Town inspector's overtime cost. If scheduling by the Developer's contrac- tor reasonably requires the Town's inspector to work overtime, the Developer or Devel- oper's contractor shall pay the Town for any additional salaries, expenses or employee benefits relating to the overtime. For purposes of this paragraph, overtime is any time over 40 hours worked in a seven-day work period, any time over eight hours worked Monday through Friday,and any time worked on weekends and legal holidays observed by the Town. MANDARINA REGIONAL CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -4- 4. Construction 4.1. Competence and diligence. The Developer employed only competent and efficient laborers, mechanics or artisans on the Work, and the Developer performed diligently to complete the Work on or before the completion date given in the notice to proceed. 4.2. Alterations to the existing Town drainage system. The Developer shall,at Developer's expense,make any and all alterations to the existing drainage system either on-site or off- site necessitated by paving,drainage,or other improvements caused by the development of the Subject Property. 5. Dedication 5.1. Transfer of the Developer-Installed Facility to the Town. Upon the Town's final ac- ceptance of the Work, the Developer shall at no cost grant,bargain, sell, convey, transfer and deliver to the Town the Developer-Installed Facility free and clear of all liens,claims, charges or encumbrances. 5.2. One-year warranty. The Developer guarantees the Work to be free from all failures due to poor workmanship or materials for a period of one year from the date of the Town's final acceptance of the Work. 5.3. Other conflicting construction prohibited. The Developer shall not construct or allow the construction of any utility,building, or other improvement that would interfere with the operation or maintenance of the Developer-Installed Facility. 5.4. Developer's obligation to maintain finished grade. The Developer guarantees that all drainage facilities on the Subject Property will be tied to the finished grade of the Devel- oper-Installed Facility. 5.5. Acceptance by the Town. The Town shall accept title to and take possession of the Developer-Installed Facility when the Work has been completed to the satisfaction of the Town.Subject to the Developer's continuing obligations under this Agreement,the Town shall operate and service the Developer-Installed Facility after taking over possession of it under this paragraph. 6. Miscellaneous 6.1. Indemnity. Developer shall indemnify, defend, and hold harmless the Town, its Mayor and Council, officers and employees, boards, committees and commissions from and against any loss, claim, suit, demand, cause of action, or liability of any nature, in- cluding but not limited to damage to property and injuries to persons, including death, arising or alleged to have arisen, in whole or in part, out of any negligent act or omission of the Developer or any contractor, subcontractor, or any person employed directly or indirectly by any of them in the performance of the Work or in the operation of the De- veloper-Installed Facility. 6.2. Binding effect. This agreement shall be binding upon and inure to the benefit of the heirs,executors,administrators, successors and assigns of the Parties. MANDARINA REGIONAL CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -5- 6.3. Consent required for assignment.The Developer may not assign this Agreement with- out the prior written consent of the Town. 6.4. Cancellation for conflict of interest. This agreement is subject to A.R.S. § 38-511, which provides for cancellation in certain instances involving conflict of interest. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the Parties have executed this Agreement as of the last date set forth below their respective signatures. THE"TOWN": The "Developer": TOWN OF MARANA, an Arizona municipal MANDARINA HOLDINGS,LLC, an Arizona corporation limited liability company By: KDL INVESTMENTS, LLC, an Arizona limited liability company, its sole By: Member Ed Honea, Mayor Date: By:� ��`�_ I a i ► h, Manager ATTEST: 2,1 (,i4 Date: David L. Udall, Town Clerk APPROVED AS TO FORM: Jane Fa all, Town Attorney STATE OF ARIZONA ) ss County offs coQGt_ ) The foregoing instrument was acknowledged before me on 0l 122/202q by Karl N. Huish, the Manager of KDL INVESTMENTS, LLC, an Arizona limited liability company, the sole Member of MANDARINA HOLDINGS, LLC, an Arizona limited liability company (the "Developer"), on behalf of MANDARINA HOLDINGS,LLC. (Seal) s� MEGAN LANDDwSKi ahrif4 ' `o� Notary Public AVV Commission Number 653978 Notary Public Expires:July 30,2027 * " Maricopa Counter MANDARINA REGIONAL CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 —6— TOWN OF MARANA AGREEMENT FOR CONSTRUCTION OF DRAINAGE FACILITIES UNDER PRIVATE CONTRACT Mandarina North Channel THIS AGREEMENT(this"Agreement") is entered into by and between the TOWN OF MA- RANA,an Arizona municipal corporation(the"Town"),and MANDARINA HOLDINGS,LLC, an Arizona limited liability company(the"Developer").The Town and the Developer are sometimes collectively referred to as the"Parties," each of which is sometimes individu- ally referred to as a"Party." RECITALS A. This Agreement is entered into and authorized pursuant to Title 14 of the Marana Town Code as it may be amended from time to time ("Marana Town Code Title 14"). B. The Developer desires for the Town to issue flood control use permits for develop- ment on the land described and depicted in the Mandarina Specific Plan, adopted by Marana Ordinance No. 2009.02,recorded in the Pima County Recorder's office at Docket 13499, Page 8 (Sequence 20090340005), and amended by administrative amendments dated October 30, 2019, and November 15, 2022, whose land area is referred to in this Agreement as the "Subject Property." C. The Developer is the owner of the "Subject Property." Title to some of the blocks of the Subject Property is held by TITLE SECURITY AGENCY,LLC,a Delaware limited liabil- ity company as Trustee under trust number 202308 ("TITLE SECURITY 202308"), for the benefit of Developer, as the sole beneficiary. D. As a condition of receiving flood control use permits from the Town for the Subject Property, the Developer agrees to install those certain drainage infrastructure improve- ments (the"Developer-Installed Facility") in accordance with the required plans, specifi- cations,and materials as outlined and depicted in the Plan for Mandarina LOMR Drainage Channel, Plan No. ENG2103-015, sealed by Psomas on May 17, 2021 and approved by the Marana Town Engineer on May 28, 2021 (the "Facility Plan"), which is on file in the office of the Town of Marana Development Engineering Department. The Developer-Installed Facility is referred to as the"North Drainage Channel" in the Facility Plan. E. The Town and MANDARINA, LLC, a Colorado limited liability company, entered into the "MANDARINA DEVELOPMENT AGREEMENT," recorded in the Pima County Re- corder's office on December 4, 2020, at Sequence 20203390091. F. The Developer is the successor in interest to Mandarina,LLC. MANDARINA NORTH CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -1 - G. The Town and the Developer entered into the "FIRST AMENDMENT TO MANDARINA DEVELOPMENT AGREEMENT," recorded in the Pima County Recorder's Office on )on,..,- Z CQ , 2024, at Sequence 2024 6760 13 (o . The Mandarina De- velopmeit Agreement and the First Amendment to Mandarina Development Agreement are referred to collectively in this Agreement as the "Mandarina Development Agree- ment." H. The Mandarina Development Agreement governs development of the Subject Property and anticipates the Developer's installation of the Developer-Installed Facility, which is referred to in the Mandarina Development Agreement as the "North Channel." I. The Developer-Installed Facility will include elements and capacity sufficient to provide drainage to other currently vacant Town properties,and to that extent the Parties wish to provide for partial reimbursement to the Developer in accordance with Marana Town Code section 14-4-3 (capacity requirements). J. The total cost of the Developer-Installed Facility is $1,737,833, which is the sum of the construction cost for the Developer-Installed Facility of$1,624,553 and the total land value of $113,280 (Subject Property land area to be used for the Developer-Installed Fa- cility is 3.776 acres,valued at$30,000 per acre). K. The Developer-Installed Facility also used 1.23 acres of land valued at$36,900(val- ued at$30,000 per acre),which was dedicated at no cost by Stewart Title and Trust under Trust No. 3564 and Title Security Agency, LLC under Trust No. 201951R. L. The Developer-Installed Facility has a capacity of 481 cubic feet per second.The Sub- ject Property is estimated to discharge 174 cubic feet per second, leaving excess capacity in the Developer-Installed Facility of 307 cubic feet per second. M. The Developer desires that the Town take ownership of, operate, and service the Developer-Installed Facility. N. The Town is willing to accept the Developer-Installed Facility and permit it to be connected to the system of Town-maintained drainage facilities provided it meets Town standards and the work is done in accordance with Town requirements. AGREEMENT Now, THEREFORE, in consideration of the foregoing premises and the mutual cove- nants set forth in this Agreement, the Parties hereby agree as follows: 1. The Developer's representation of ownership. By entering into this Agreement, the Developer represents that it is the sole beneficiary of TITLE SECURITY 202308 and is entitled to enter into this Agreement. 2. The Developer-Installed Facility 2.1. Developer installation of the Developer-Installed Facility. The Developer has designed and installed, at the Developer's own expense (subject to the reimbursement provisions of this Agreement), the drainage infrastructure improvements as depicted in the Facility MANDARINA NORTH CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -2- Plan. The drainage infrastructure improvements depicted on the Facility Plan as the "North Drainage Channel" are referred to in this Agreement as the"Developer-Installed Facility," and shall conform to the design standards of the Pima County Regional Flood Control District and the Town of Marana Town Code Title 14 and special specifications and details as approved by the Town and by this reference made a part of this Agreement. The Facility Plan shall include a plan note identifying the Developer-Installed Facility as a new drainage facility and shall show any and all alterations to the existing drainage system. Construction and installation of the Developer-Installed Facility in accordance with the Facility Plan, including without limitation all labor, materials, equipment, sup- plies, and tools required for the construction and installation, is referred to in this Agree- ment as the "Work." 2.2. Competitive bids. As a condition of and prerequisite to receiving any reimburse- ment under this Agreement, the Developer went through the competitive bidding pro- cess for the Work in compliance with Title 34 of the Arizona Revised Statutes. 2.3. Work by licensed contractor. The Work was performed by a contractor properly li- censed by the State of Arizona as determined by the Arizona Registrar of Contractors. In addition to any other contractor's license classifications required by the Arizona Registrar of Contractors, the contractor held contractor's license classifications A and A-12. 2.4. Developer-Installed Facility acceptance by Town. No flood plain use permits will be issued in reliance on the Developer-Installed Facility,and the Developer-Installed Facility will not be accepted for maintenance as part of the Towri s drainage system, until the Developer-Installed Facility has been accepted by the Town in accordance with Marana Town Code Title 14. 2.5. Developer's certification. Execution of this Agreement certifies that the Developer has reviewed the Facility Plan and all other specifications applicable to the Work. 2.6. Termination for lack of Work. Approval of the Facility Plan shall lapse and this Agreement shall terminate if the Work is discontinued for a period of one year. 2.7. Oversizing Recovery Charge. The Parties have determined that the Developer-In- stalled Facility will have excess capacity of 307 cubic feet per second as a result of and upon completion of the Work and after the discharge of 174 cubic feet per second from the Subject Property. Consequently, pursuant to Marana Town Code section 14-4-3 (C), the Town hereby establishes an "oversizing recovery charge" of$3,612.96 per cubic foot per second for drainage discharges to the North Channel.For purposes of this paragraph, all of the following apply: 2.7.1. The oversizing recovery charge shall be payable only until the Developer- Installed Facility reaches its design capacity; currently anticipated to be for an addi- tional 307 cubic feet per second discharges to the Developer-Installed Facility. 2.7.2. The successors in interest to Stewart Title and Trust under Trust No. 3564 and Title Security Agency,LLC under Trust No.201951R shall have a credit of$36,900 toward the Developer-Installed Facility oversizing recovery charge. MANDARINA NORTH CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -3- 2.7.3. Based on the oversizing recovery charge of$3,612.96 per cubic foot per sec- ond, and subtracting the credit in the previous subparagraph, the Parties' current es- timate of the total potential reimbursement through oversizing recovery charges for the Developer-Installed Facility is$1,072,278.72. 2.7.4. The oversizing recovery charge payments for development benefitted by the Developer-Installed Facility shall be payable as described in the Mandarina Develop- ment Agreement. 2.7.5. The Developer shall have a beneficial ownership interest in the Developer- Installed Facility sufficient to prohibit drainage discharge into it from newly devel- oped properties unless and until the oversizing recovery charge is paid. 2.7.6. The drainage discharge into the Developer-Installed Facility from newly de- veloped properties shall be determined by a drainage report prepared by a licensed civil engineer and approved by the Town Engineer. 2.7.7. The 174 cubic feet per second drainage discharge from the Subject Property has been calculated assuming certain development on the Subject Property. If the ac- tual development of the Subject Property results in a different drainage discharge from the Subject Property,the remaining available capacity of the Developer-Installed Facility, and the total potential reimbursement through oversizing recovery charges, shall be re-calculated accordingly. 2.7.8. The Town makes no guarantee that the Developer will receive full reim- bursement of the Developer's cost of completing the Work. 3. Engineering and Inspection 3.1. Registered civil engineer. The Developer employed a registered Civil Engineer to design,lay out, establish control lines for and certify the layout of the Work according to the Facility Plan. 3.2. Town inspector's authority. Any inspector authorized by the Town shall have full inspection authority over the Work. 3.3. Inspection provisions. The Developer shall furnish the Town's inspector with all facilities reasonably necessary to inspect the Work. The Work shall be subject to Town inspection at all times. Defective work shall be corrected in a manner satisfactory to the Town's inspector. Inspection by the Town is for the purpose of ensuring compliance with plans and specifications only. The Town makes no guarantee as to the safety or engineer- ing soundness of plans prepared by the Developer or any contractor. 3.4. Payment of Town inspector's overtime cost. If scheduling by the Developer's contrac- tor reasonably requires the Town's inspector to work overtime, the Developer or Devel- oper's contractor shall pay the Town for any additional salaries, expenses or employee benefits relating to the overtime. For purposes of this paragraph, overtime is any time over 40 hours worked in a seven-day work period, any time over eight hours worked MANDARINA NORTH CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -4- Monday through Friday,and any time worked on weekends and legal holidays observed by the Town. 4. Construction 4.1. Competence and diligence. The Developer employed only competent and efficient laborers, mechanics or artisans on the Work, and the Developer performed diligently to complete the Work on or before the completion date given in the notice to proceed. 4.2. Alterations to the existing Town drainage system. The Developer shall,at Developer's expense,make any and all alterations to the existing drainage system either on-site or off- site necessitated by paving,drainage, or other improvements caused by the development of the Subject Property. 5. Dedication 5.1. Transfer of the Developer-Installed Facility to the Town. Upon the Town's final ac- ceptance of the Work, the Developer shall at no cost grant,bargain, sell, convey, transfer and deliver to the Town the Developer-Installed Facility free and clear of all liens,claims, charges or encumbrances. 5.2. One-year warranty. The Developer guarantees the Work to be free from all failures due to poor workmanship or materials for a period of one year from the date of the Town's final acceptance of the Work. 5.3. Other conflicting construction prohibited. The Developer shall not construct or allow the construction of any utility,building, or other improvement that would interfere with the operation or maintenance of the Developer-Installed Facility. 5.4. Developer's obligation to maintain finished grade. The Developer guarantees that all drainage facilities on the Subject Property will be tied to the finished grade of the Devel- oper-Installed Facility. 5.5. Acceptance by the Town. The Town shall accept title to and take possession of the Developer-Installed Facility when the Work has been completed to the satisfaction of the Town.Subject to the Developer's continuing obligations under this Agreement,the Town shall operate and service the Developer-Installed Facility after taking over possession of it under this paragraph. 6. Miscellaneous 6.1. Indemnity. Developer shall indemnify, defend, and hold harmless the Town, its Mayor and Council, officers and employees, boards, committees and commissions from and against any loss, claim, suit, demand, cause of action, or liability of any nature, in- cluding but not limited to damage to property and injuries to persons, including death, arising or alleged to have arisen,in whole or in part, out of any negligent act or omission of the Developer or any contractor, subcontractor, or any person employed directly or indirectly by any of them in the performance of the Work or in the operation of the De- veloper-Installed Facility. MANDARINA NORTH CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -5- 6.2. Binding effect. This agreement shall be binding upon and inure to the benefit of the heirs,executors,administrators, successors and assigns of the Parties. 6.3. Consent required for assignment.The Developer may not assign this Agreement with- out the prior written consent of the Town. 6.4. Cancellation for conflict of interest. This agreement is subject to A.R.S. § 38-511, which provides for cancellation in certain instances involving conflict of interest. [SIGNATURE PAGE FOLLOWS] MANDARINA NORTH CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -6- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the last date set forth below their respective signatures. THE"TOWN": The "Developer": TOWN OF MARANA, an Arizona municipal MANDARINA HOLDINGS,LLC, an Arizona corporation limited liability company By: KDL INVESTMENTS, LLC, an Arizona / limited liability company, its sole By: Member Ed Honea,/Mayor Date: 2 / t"Zo 2 4-1 By. arl . ui , Manager �( ATTEST: Date: ( " ZtD 2 -1 David L. Udall, Town Clerk APPROVED AS TO FORM: lk_p, �� 9c ' Jane airall,Town Attorney STATE OF ARIZONA ) ss County of M eti('ico p2o.. ) The foregoing instrument was acknowledged before me on 0 t (22.1202 4 by Karl N. Huish, the Manager of KDL INVESTMENTS, LLC, an Arizona limited liability company, the sole Member of MANDARINA HOLDINGS,LLC, an Arizona limited liability company (the "Developer"), on behalf of MANDARINA HOLDINGS,LLC. (Seal) - - - MEGAN LANDOWSKI KI / ���� //,�P� C� °� Notary Public ( •� 4.(Dv Commission Number 653978 Notary Public Expires:July 30,2027 / • i' • Mancopa County MANDARINA NORTH CHANNEL CONSTRUCTION AGREEMENT 1/22/2024 -7- TOWN OF MARANA AGREEMENT FOR CONSTRUCTION OF DRAINAGE FACILITIES UNDER PRIVATE CONTRACT Mandarina Detention Basin THIS AGREEMENT(this "Agreement") is entered into by and between the TOWN OF MA- RANA,an Arizona municipal corporation(the"Town"),and MANDARINA HOLDINGS,LLC, an Arizona limited liability company(the"Developer").The Town and the Developer are sometimes collectively referred to as the "Parties," each of which is sometimes individu- ally referred to as a"Party." RECITALS A. This Agreement is entered into and authorized pursuant to Title 14 of the Marana Town Code as it may be amended from time to time ("Marana Town Code Title 14"). B. The Developer desires for the Town to issue flood control use permits for develop- ment on the land described and depicted in the Mandarina Specific Plan, adopted by Marana Ordinance No. 2009.02,recorded in the Pima County Recorder's office at Docket 13499, Page 8 (Sequence 20090340005), and amended by administrative amendments dated October 30, 2019, and November 15, 2022, whose land area is referred to in this Agreement as the "Subject Property." C. The Developer is the owner of the "Subject Property." Title to some of the blocks of the Subject Property is held by TITLE SECURITY AGENCY,LLC,a Delaware limited liabil- ity company as Trustee under trust number 202308 ("TITLE SECURITY 202308"), for the benefit of Developer, as the sole beneficiary. D. As a condition of receiving flood control use permits from the Town for the Subject Property, the Developer installed those certain drainage infrastructure improvements (the"Developer-Installed Facility") in accordance with the required plans,specifications, and materials as outlined and depicted in the Plan for Mandarina Regional Retention Ba- sin, Plan No. ENG 2110-004, sealed by EPS Group, Inc. on December 16, 2021 and ap- proved by the Marana Town Engineer on January 19, 2022 (the "Facility Plan"),which is on file in the office of the Town of Marana Development Engineering Department. E. The Town and MANDARINA, LLC, a Colorado limited liability company, entered into the "MANDARINA DEVELOPMENT AGREEMENT," recorded in the Pima County Re- corder's office on December 4, 2020, at Sequence 20203390091. F. The Developer is the successor in interest to Mandarina, LLC. 00090899.DOCX/1 MANDARINA DETENTION BASIN CONSTRUCTION AGREEMENT 1/22/2024 -1 - G. The Town and the Developer entered into the "FIRST AMENDMENT TO MANDARINA DEVELOPMENT AGREEMENT," recorded in the Pima County Recorder's Office on , 2024, at Sequence 2024 c 2(D 0 l3(0 . The Mandarina De- velopment Agreement and the First Amendment to Mandarina Development Agreement are referred to collectively in this Agreement as the "Mandarina Development Agree- ment." H. The Mandarina Development Agreement governs development of the Subject Property and anticipates the Developer's installation of the Developer-Installed Facility, which is referred to in the Mandarina Development Agreement as the"Detention Basin." I. The Developer-Installed Facility includes elements and capacity sufficient to pro- vide drainage to other currently vacant Town properties, and to that extent the Parties wish to provide for partial reimbursement to the Developer in accordance with Marana Town Code section 14-4-3 (capacity requirements). J. The total cost of the Developer-Installed Facility is $6,219,619, which is the sum of the construction cost for the Developer-Installed Facility of$5,522,719 and the total land value of $696,900 (Subject Property land area to be used for the Developer-Installed Fa- cility is 23.23 acres,valued at$30,000 per acre). K. The Developer-Installed Facility has a storage capacity of 187.3 acre-feet. The Sub- ject Property is estimated to require 60.2 acre-feet of storage, leaving excess storage ca- pacity in the Developer-Installed Facility of 127.1 acre-feet. L. The Developer desires that the Town take ownership of,operate,and service the De- veloper-Installed Facility. M. The Town is willing to accept the Developer-Installed Facility and permit it to be connected to the system of Town-maintained drainage facilities provided it meets Town standards and the work is done in accordance with Town requirements. AGREEMENT Now, THEREFORE, in consideration of the foregoing premises and the mutual cove- nants set forth in this Agreement,the Parties hereby agree as follows: 1. The Developer's representation of ownership. By entering into this Agreement, the Developer represents that it is the sole beneficiary of TITLE SECURITY 202308 and is entitled to enter into this Agreement. 2. The Developer-Installed Facility 2.1. Developer installation of the Developer-Installed Facility. The Developer has designed and installed, at the Developer's own expense (subject to the reimbursement provisions of this Agreement), the drainage infrastructure improvements as depicted in the Facility Plan.The drainage infrastructure improvements depicted on the Facility Plan are referred to in this Agreement as the "Developer-Installed Facility," and shall conform to the de- sign standards of the Pima County Regional Flood Control District and the Town of Ma- rana Town Code Title 14 and special specifications and details as approved by the Town 00090899.DOCX/1 MANDARINA DETENTION BASIN CONSTRUCTION AGREEMENT 1/22/2024 -2- and by this reference made a part of this Agreement.The Facility Plan shall include a plan note identifying the Developer-Installed Facility as a new drainage facility and shall show any and all alterations to the existing drainage system. Construction and installation of the Developer-Installed Facility in accordance with the Facility Plan, including without limitation all labor, materials, equipment, supplies, and tools required for the construc- tion and installation, is referred to in this Agreement as the "Work." 2.2. Competitive bids. As a condition of and prerequisite to receiving any reimburse- ment under this Agreement, the Developer went through the competitive bidding pro- cess for the Work in compliance with Title 34 of the Arizona Revised Statutes. 2.3. Work by licensed contractor. The Work was performed by a contractor properly li- censed by the State of Arizona as determined by the Arizona Registrar of Contractors. In addition to any other contractor's license classifications required by the Arizona Registrar of Contractors, the contractor held contractor's license classifications A and A-12. 2.4. Developer-Installed Facility acceptance by Town. No flood plain use permits will be issued in reliance on the Developer-Installed Facility,and the Developer-Installed Facility will not be accepted for maintenance as part of the Town's drainage system, until the Developer-Installed Facility has been accepted by the Town in accordance with Marana Town Code Title 14. 2.5. Developer's certification. Execution of this Agreement certifies that the Developer has reviewed the Facility Plan and all other specifications applicable to the Work. 2.6. Termination for lack of Work. Approval of the Facility Plan shall lapse and this Agreement shall terminate if the Work is discontinued for a period of one year. 2.7. Oversizing Recovery Charge. The Parties have determined that the Developer-In- stalled Facility will have excess storage capacity of 127.1 acre-feet as a result of and upon completion of the Work and after the 60.2 acre-feet of storage capacity required for de- velopment of the Subject Property. Consequently, pursuant to Marana Town Code sec- tion 14-4-3 (C), the Town hereby establishes an "oversizing recovery charge" of $33,206.72 per acre-foot for storage capacity used in the Detention Basin. For purposes of this paragraph, all of the following apply: 2.7.1. The oversizing recovery charge shall be payable only until the Developer-In- stalled Facility reaches its design capacity;currently anticipated to be for an additional 127.1 acre-feet of storage capacity used in the Developer-Installed Facility. 2.7.2. Based on the oversizing recovery charge of$33,206.72 per acre-foot,the Par- ties' current estimate of the total potential reimbursement through oversizing recov- ery charges for the Developer-Installed Facility is$4,220,574.11. 2.7.3. The oversizing recovery charge payments for development benefitted by the Developer-Installed Facility shall be payable as described in the Mandarina Develop- ment Agreement. 00090899.DOCX/1 MANDARINA DETENTION BASIN CONSTRUCTION AGREEMENT 1/22/2024 -3- A 2.7.4. The Developer shall have a beneficial ownership interest in the Devel- oper-Installed Facility sufficient to prohibit drainage discharge into it from newly de- veloped properties unless and until the oversizing recovery charge is paid. 2.7.5. The storage capacity required at the Developer-Installed Facility for newly developed properties shall be determined by a drainage report prepared by a licensed civil engineer and approved by the Town Engineer. 2.7.6. The 60.2 acre-feet of storage capacity required for development of the Subject Property has been calculated assuming certain development on the Subject Property. If the actual development of the Subject Property results in a different storage capacity required for development of the Subject Property,the remaining available capacity of the Developer-Installed Facility, and the total potential reimbursement through over- sizing recovery charges, shall be re-calculated accordingly. 2.7.7. The Town makes no guarantee that the Developer will receive full reim- bursement of the Developer's cost of completing the Work. 3. Engineering and Inspection 3.1. Registered civil engineer. The Developer employed a registered Civil Engineer to design, lay out, establish control lines for and certify the layout of the Work according to the Facility Plan. 3.2. Town inspector's authority. Any inspector authorized by the Town shall have full inspection authority over the Work. 3.3. Inspection provisions. The Developer shall furnish the Town's inspector with all facilities reasonably necessary to inspect the Work. The Work shall be subject to Town inspection at all times. Defective work shall be corrected in a manner satisfactory to the Town's inspector.Inspection by the Town is for the purpose of ensuring compliance with plans and specifications only. The Town makes no guarantee as to the safety or engineer- ing soundness of plans prepared by the Developer or any contractor. 3.4. Payment of Town inspector's overtime cost. If scheduling by the Developer's contrac- tor reasonably requires the Town's inspector to work overtime, the Developer or Devel- oper's contractor shall pay the Town for any additional salaries, expenses or employee benefits relating to the overtime. For purposes of this paragraph, overtime is any time over 40 hours worked in a seven-day work period, any time over eight hours worked Monday through Friday,and any time worked on weekends and legal holidays observed by the Town. 4. Construction 4.1. Competence and diligence. The Developer employed only competent and efficient laborers, mechanics or artisans on the Work, and the Developer performed diligently to complete the Work on or before the completion date given in the notice to proceed. 4.2. Alterations to the existing Town drainage system. The Developer shall,at Developer's expense, make any and all alterations to the existing drainage system either on-site or 00090899.DOCX/1 MANDARINA DETENTION BASIN CONSTRUCTION AGREEMENT 1/22/2024 -4- off-site necessitated by paving, drainage, or other improvements caused by the develop- ment of the Subject Property. 5. Dedication 5.1. Transfer of the Developer-Installed Facility to the Town. Upon the Town's final ac- ceptance of the Work, the Developer shall at no cost grant, bargain, sell, convey,transfer and deliver to the Town the Developer-Installed Facility free and clear of all liens,claims, charges or encumbrances. 5.2. One-year warranty. The Developer guarantees the Work to be free from all failures due to poor workmanship or materials for a period of one year from the date of the Town's final acceptance of the Work. 5.3. Other conflicting construction prohibited. The Developer shall not construct or allow the construction of any utility,building, or other improvement that would interfere with the operation or maintenance of the Developer-Installed Facility. 5.4. Developer's obligation to maintain finished grade. The Developer guarantees that all drainage facilities on the Subject Property will be tied to the finished grade of the Devel- oper-Installed Facility. 5.5. Acceptance by the Town. The Town shall accept title to and take possession of the Developer-Installed Facility when the Work has been completed to the satisfaction of the Town.Subject to the Developer's continuing obligations under this Agreement,the Town shall operate and service the Developer-Installed Facility after taking over possession of it under this paragraph. 6. Miscellaneous 6.1. Indemnity. Developer shall indemnify, defend, and hold harmless the Town, its Mayor and Council, officers and employees, boards, committees and commissions from and against any loss, claim, suit, demand, cause of action, or liability of any nature, in- cluding but not limited to damage to property and injuries to persons, including death, arising or alleged to have arisen, in whole or in part, out of any negligent act or omission of the Developer or any contractor, subcontractor, or any person employed directly or indirectly by any of them in the performance of the Work or in the operation of the De- veloper-Installed Facility. 6.2. Binding effect. This agreement shall be binding upon and inure to the benefit of the heirs,executors, administrators,successors and assigns of the Parties. 6.3. Consent required for assignment.The Developer may not assign this Agreement with- out the prior written consent of the Town. 6.4. Cancellation for conflict of interest. This agreement is subject to A.R.S. §38-511, which provides for cancellation in certain instances involving conflict of interest. [SIGNATURE PAGE FOLLOWS] 00090899.DOCX/1 MANDARINA DETENTION BASIN CONSTRUCTION AGREEMENT 1/22/2024 -5- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the last date set forth below their respective signatures. THE"TOWN": The "Developer": TOWN OF MARANA, an Arizona municipal MANDARINA HOLDINGS,LLC, an Arizona corporation limited liability company By: KDL INVESTMENTS, LLC, an Arizona �IU limited liability company, its sole By: Member Ed Honea, Mayor Date: 7/-7(7,o2-""1 B /A\- a4 , Manager ATTEST: Date: 112 Z ( 2enA David L. Udall, Town Clerk APPROVED AS TO FORM: Jane Fairall, Town Attorney STATE OF ARIZONA ) ss County of at(iCO ya., ) The foregoing instrument was acknowledged before me on Of l`.2./9_02[.( by Karl N. Huish, the Manager of KDL INVESTMENTS, LLC, an Arizona limited liability company, the sole Member of MANDARINA HOLDINGS,LLC, an Arizona limited liability company (the "Developer"), on behalf of MANDARINA HOLDINGS,LLC. (Seal) ; MEGAN LANDOWSKI Public 0.91/ Notary Public Commission Number 653978 otary Public < � Expires:July 30,2027 Mari a Coon 00090899.DOCX/1 MANDARINA DETENTION BASIN CONSTRUCTION AGREEMENT 1/22/2024 -6-