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  11.B.       
Meeting Date: 05/17/2022  
From: Genevieve Pearthree, Senior Planner

TITLE:
Consideration and Adoption of Resolution No. 2022-22:   A resolution of the Flagstaff City Council, authorizing the execution of a Development Agreement between the City of Flagstaff and Flagland LLC for Flagstaff Rehab Campus related to the development of approximately 10.05 acres of real property generally located at 7000 North Highway 89 and establishing an effective date.
STAFF RECOMMENDED ACTION:
1) Read Resolution No. 2022-22 by title only
2) City Clerk reads Resolution No. 2022-22 by title only (if approved above)
3) Adopt Resolution No. 2022-22
Executive Summary:
**IF AVAILABLE, DRAFT DEVELOPMENT AGREEMENT TO BE PROVIDED PRIOR TO THE FINAL AGENDA**

State law allows the City to enter into development agreements with landowners and persons having an interest in real property in order to facilitate the development of the property.  The Flagstaff Rehab Campus development agreement is intended to facilitate the development of approximately 10.05 acres of land generally located at 7000 North Highway 89.  The applicant intends to develop the property for use as a 174-bed mental and behavioral health and substance abuse treatment campus, and set aside two areas for future development.

The property is currently outside of the corporate boundaries of the City of Flagstaff and has the Coconino County Zoning Designation of Commercial Heavy 10,000 (CH-10,000). The applicant is requesting to annex the property into the City of Flagstaff corporate boundaries and receive City of Flagstaff Highway Commercial, Resource Protection Overlay (HC RPO) zoning in Annexation Application No. PZ-20-00164-03. Upon annexation, the Developer is requesting 1.09 acres of the subject Property receive a Rezoning to Rural Residential, Resource Protection Overlay (RR, RPO) zoning in Concept Zoning Map Amendment Application No. PZ-20-00164-04. The agreement covers the requested entitlements for the property, specifics of the development plan, developer obligations, and City obligations.
Financial Impact:
This Development Agreement is associated with concurrent annexation and rezoning requests. The purpose of the annexation request is to extend the City of Flagstaff corporate boundary to provide the subject property with water, sewer, and other City services to facilitate the development of a 174-bed mental behavioral health and substance abuse treatment campus and two commercial pads. The development will extend a waterline along North Highway 89 in the public right of way, and will extend a sewer line across the subject property. The waterline extension will be dedicated to the City of Flagstaff for continued maintenance and operation. Currently, the site has access directly onto an ADOT-maintained roadway. Upon annexation, a portion of the assessed property tax will go to the City of Flagstaff. 
Policy Impact:
There are no policy impacts affiliated with the Development Agreement.
Connection to PBB Priorities/Objectives, Carbon Neutrality Plan & Regional Plan:
PBB Priorities/Objectives
  • Support social services, community partners, and housing opportunities.
  • Utilize existing long-range plan(s) that identify the community's future infrastructure needs and all associated costs.
  • Grow and strengthen a more robust, diverse, and resilient economy.
  • Provide amenities and activities that support a healthy lifestyle.
Regional Plan
  • A full summary of community benefits and considerations related to this request are addressed in more detail in the Planning & Zoning commission Staff Reports for the concurrent Annexation and Concept Zoning Map Amendment Reports, dated November 23, 2021, attached to the staff summaries for Ordinance No. 2022-01 and Ordinance No. 2022-02.
Carbon Neutrality Plan
  • DD-2: Create inclusive networks for walking and biking that are continuous, attractive, safe, comprehensive, and convenient for people of all ages.
Has There Been Previous Council Decision on This:
On January 4, 2022, January 18, 2022, February 1, 2022, and April 19, 2022, the City Council held hearings to consider and adopt Ordinance No. 2022-01 to annex 10.05 acres of land, located at 7000 North Highway 89, and Ordinance No. 2022-02 to rezone 1.09 acres of the 10.05-acres from Highway Commercial (HC) to Rural Residential (RR) zoning to allow for an equine therapy facility.
  • On January 4, 2022, the City Council held a public hearing to consider the proposed annexation. 
  • On January 18, 2022, the City Council voted to read both ordinances by title only for the first time.
  • On February 1, 2022, the City Council voted to continue the second read of both ordinances until April 19, 2022, and directed the applicant to pursue a Development Agreement to require the parcel being annexed to develop in substantial conformance with the Concept Plan deemed “Complete with Conditions” by the City of Flagstaff Inter-Division Staff (IDS) on March 16, 2021 in Application No. PZ-20-00164-01.
  • On April 19, 2022, the City Council voted to continue the second read of the ordinances until May 17, 2022. 
Options and Alternatives:
  1. Approve the Flagstaff Rehab Campus Development Agreement as presented.
  2. Approve the Flagstaff Rehab Campus Development Agreement with additional, modified, or deleted terms.
  3. Remand the Flagstaff Rehab Campus Development Agreement back to staff for additional negotiations with applicant.
  4. Deny the Flagstaff Rehab Campus Development Agreement.
Background/History:
Development Overview
The 10.05-acre parcel that is the subject of this Development Agreement (and concurrent Annexation and Concept Zoning Map Amendment requests) is adjacent to the northern Flagstaff city boundary and is located just east of North Highway 89. The parcel is within the Urban Service Boundary as identified by the Flagstaff Regional Plan 2030, and will receive city trash, water, and sewer service upon annexation. The subject site previously contained Blue Ribbon Homes (a manufactured home dealership) and is in the Heavy Commercial (CH-10,000) Coconino County zoning district. The parcel is proposed to be annexed into the Flagstaff city limits with Highway Commercial (HC) zoning and a Resource Protection Overlay (RPO). The applicant proposes to develop a 174-bed mental behavioral health and substance abuse treatment campus and set aside two areas for future commercial development.

After annexation, the subject parcel is proposed to be combined with the approximately 2.15-acre vacant parcel to the south (APN 113-17-011A), which is already inside the city limits. The combined parcels (12.21 acres total) will then be sudivided into four separate parcels. Parcels 1 and 2 will consist of the campus. Parcels 3 and 4 are proposed to be future commercial pads (conceptually shown as restaurants/cafes).

The applicant has also submitted a concurrent Concept Zoning Map Amendment request PZ-20-00164-04 (Ordinance 2022-02) to rezone the northern 1.09 acres of the 10.05-acre parcel from HC to Rural Residential (RR) zoning once the parcel is annexed. The purpose of that request is to accommodate an Equestrian Recreational Facility that will provide equine therapy to patients. City Code Chapter 6-03: Animal Keeping does not allow large livestock (including horses) in the HC zone, but does allow large livestock in the RR zone. The Zoning Code allows Equestrian Recreational Facilities with a Conditional Use Permit in the RR zone.

Project History and Next Steps
The applicant submitted for Concept Plan and Concept Plat review prior to submitting Annexation and Concept Zoning Map Amendment applications. The purpose of the Concept Plan/Plat reviews is to determine whether the proposed project conceptually conforms with City Code. The City of Flagstaff Inter-Division Staff (IDS) made this determination and as such deemed both applications to be “Complete with Conditions” (the Concept Plan on March 16, 2021, and the Concept Plat on May 19, 2021).

The applicant will apply for Site Plan approval should the City Council approve the Annexation and Concept Zoning Map Amendment applications. Site Plan constitutes a formal approval, which, if obtained, will allow the applicant to apply for Civil Engineering Plans and Building Permit review, and for a Conditional Use Permit for the equestrian facility. The applicant will also submit for final plat review to subdivide the entire 12.21-acre site into four separate parcels. The City Council approves final plats.
Key Considerations:
On February 1, 2022, the City Council directed the applicant to pursue a Development Agreement to require the parcel to develop in substantial conformance with the Concept Plan deemed “Complete with Conditions” by the City of Flagstaff Inter-Division Staff (IDS) on March 16, 2021 in Application No. PZ-20-00164-01. The draft Development Agreement is attached to this report.  The primary purpose of this agreement is to set out roles and responsibilities regarding the following (not limited to):
  1. The property will be developed in substantial conformance with the Concept Plan, Natural Resource Protection Plan, and project narrative including but not limited to the proposed density, intensity, and general layout of the site, deemed “Complete with Conditions” by the City of Flagstaff Inter-Division Staff (IDS) on March 16, 2021 in Application No. PZ-20-00164-01.
  2. Allowed uses for the two areas set aside for future development in the Concept Plan are all uses allowed in the Highway Commercial (HC) zone.
  3. Off-site traffic improvements.
  4. Maintenance of adjacent right of way landscaping and irrigation. 
  5. On- and off-site water and sewer line extensions. 
  6. On-site stormwater improvements.
  7. Utility easements. 
Community Benefits and Considerations:
If annexed and developed as stipulated in the draft Development Agreement, the project will provide a mental health and substance abuse treatment campus, as well as two commercial pads for future development. A full summary of community benefits and considerations related to this request are addressed in more detail in the Planning & Zoning commission Staff Reports for the concurrent Annexation and Concept Zoning Map Amendment Reports, dated November 23, 2021, attached to the staff summaries for Ordinance No. 2022-01 and Ordinance No. 2022-02.
Community Involvement:
Public hearings before the Planning and Zoning Commission and City Council are conducted in conjunction with requests for annexation.  In accordance with State statute, a notice of the public hearing was provided by placing an ad in the Arizona Daily Sun, posting at least three notices on the property, and mailing a notice to all property owners within 600 feet of the site (exceeding the 300-foot minimum notification area), and to the City’s “Registry of Persons and Groups.” Annexation notices were also provided to the Coconino County Recorder, County Assessor, County Community Development Department, and the Chair of the Board of Supervisors.  All notifications were completed at least 15 days prior to the first scheduled public hearing. A copy of the publication notice, pictures of the postings, a mailing list, and a copy of the mailing notice are included in the attached Public Participation Plan. 

The Planning and Zoning Commission held a public hearing on this application on December 8, 2021. The Commission recommended approval of the annexation by a unanimous vote (5-members present). No public comments were received. 

The applicant held a virtual neighborhood meeting on June 30, 2021, via Zoom as part of the Neighborhood Meeting public notification process required for annexations.  During the meeting, the applicant provided background information about the project and answered questions posed by meeting attendees through the meeting chat or verbally. The applicant created a Record of Proceedings, which was provided to meeting attendees via hard copy mail and email in accordance with city code (and is included as part of the Public Participation Plan). Staff was subsequently contacted by three community members who requested additional information about the development.

Staff received one public comment following the February 1, 2022 City Council meeting. The comment is included at the end of the Public Participation Plan attached to this staff summary reports associated with Ordinance 2022-01 and Ordinance 2022-02. 
Attachments
Res. 2022-22


    

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