Apr 28, 2025 Special City Council

[00:00:02]

OKAY.

IT'S NOT GOING AWAY.

I KNOW .

OKAY, LET'S CALL THE MEETING

[1. CALL TO ORDER/PLEDGE OF ALLEGIANCE/MOMENT OF SILENCE]

PLEASE JOIN ME FOR THE PLEDGE OF ALLEGIANCE.

I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS.

STANDS.

ONE NATION, UNDERG GOD, INDIVISIBLE, WITH LIBERTY.

LIBERTY, JUSTICE FOR SICK.

AND NOW A MOMENT OF SILENCE.

OKAY.

THANK YOU MADAM CLERK, WOULD YOU PLEASE

[2. ROLL CALL]

HERE, VICE MAYOR PLU.

PRESENT.

COUNCILOR DUNN? HERE.

COUNCILOR LTZ.

PRESENT.

COUNCILOR FERMAN? HERE.

COUNCILOR KINSELLA.

PRESENT.

COUNCILOR FA.

HERE.

OKAY, THANK YOU.

OKAY, ITEM THREE,

[3.a. Discussion and consultation with the City Attorney for legal advice and to consider the City’s position and instruct its attorneys regarding contracts that are the subject of negotiations regarding Villas on Shelby ground lease agreement, declaration, deed of trust, and promissory note with Villas on Shelby, LLC (HS Development Partners, LLC) at 2250 Shelby Dr., Sedona, Arizona. This matter is brought in executive session pursuant to A.R.S. § 38-431.03(A)(3) & (4).]

GROUND LEASE AGREEMENT, DECLARATION DEED OF TRUST AND PROMISSORY NOTE WITH THE VILLAS OF SHELBY, LLC HS.

DEVELOPMENT LLC UH, 2 22 50 SHALL DRIVE SEDONA, ARIZONA.

THIS MATTER IS BROUGHT IN EXECUTIVE SESSION PURSUANT TO A RS 38 DASH 4 3 1 0 3 A THREE AND FOUR.

CAN I HAVE A MOTION PLEASE? I SECOND.

OR MOTION, I'M SORRY.

I'D LIKE TO MOVE THAT WE GO INTO EXECUTIVE SESSION TO DISCUSS THE ITEM AS STATED.

SECOND, SECOND.

SECOND BY COUNCILOR DUNN.

ALL IN FAVOR SAY AYE.

AYE.

AYE.

ANY OPPOSED? BE UNANIMOUS.

OKAY, WE'RE BACK.

SO WE'RE GONNA COME BACK INTO, WE'RE GONNA COME BACK INTO PUBLIC SESSION AND BEF WE'LL TAKE A BREAK, FIVE MINUTE BREAK BEFORE WE GO TO ITEM B.

THANK YOU.

OKAY.

FIVE MINUTES.

AND I MEAN FIVE MINUTES.

SO 25 AFTER.

OKAY.

WE'LL BE BACK.

OKAY, JOE, THANK YOU FOR ING.

SO, OKAY.

ALL RIGHT.

THIS SHOULD BE INTERESTING.

SO WE'LL MOVE FORWARD WITH ITEM

[3.b. AB 3210 Discussion/possible action regarding approval of a Resolution approving the Ground Lease with Villas on Shelby, LLC (HS Development Partners, LLC) for the Villas on Shelby Affordable Housing Project.]

DISCUSSION, POSSIBLE ACTION REGARDING APPROVAL OF A RESOLUTION APPROVING THE GROUND LEASE FOR THE VILLAS ON SHELBY, LLCC HS, DEVELOPMENT PARTNERS, LLC FOR THE VILLAS ON SHELBY, AFFORDABLE HOUSING PROJECT.

JEANNIE, NOTHING TO, SO, SO, YEAH, SO YOU'RE SITTING THERE AS OPPOSED TO ANNETTE PRESENTING.

SO, GOOD AFTERNOON, MAYOR, VICE MAYOR COUNCIL.

SO THE VILLAS ON SHELBY PROJECT HAS BEEN A LONG TIME COMING.

IT'S BEEN, UH, APPROXIMATELY TWO YEARS NOW.

WE ARE, WE ARE AT THE FINAL STAGES OF BEING ABLE TO, AND READY TO CLOSE FOR THIS 30 UNIT HOUSING PROJECT FOR THE CITY OF SEDONA.

UM, THE LEASE WAS BROUGHT BACK TO COUNCIL.

UM, WE'VE, KURT, UH, CITY ATTORNEY AND I HAVE BEEN WORKING REALLY DILIGENTLY TO, YOU KNOW, GET THIS ALL TOGETHER.

UM, IT IS COMING TO COUNCIL NOW BECAUSE FUNDING WAS DELAYED.

THE BOND WAS NOT ISSUED UNTIL JANUARY.

AND THE, UM, AND THAT'S WHAT KICKS OFF THE INVESTOR.

UM, AND, UH, YOU KNOW, THE FINAL DOCUMENTATION.

AND SO THIS LEASE IS NOW IN COMPLIANCE WITH IRC SECTION 42.

UM, AND ALSO WITH LITECH REQUIREMENTS.

AND I THINK THAT'S PROBABLY IT.

WE'RE, WE'RE JUST, UM, ASKING FOR COUNSEL TO APPROVE THE LEASE SO WE CAN CLOSE ON THE, UM, THE PROJECT, UH, TO GET THE AFFORDABLE HOUSING BUILT.

OKAY.

KURT, YOU, MR. MAYOR AND COUNSEL.

SO, JUST WANTED TO BRIEFLY FOR THE RECORD, UH, STATE THAT THE, UH, COUNSEL ORIGINALLY APPROVED A 75 YEAR LEASE WITH 75 YEARS OF AFFORDABILITY AND A 300,000 CITY LOAN, UH, WITH THE OPTION TO PURCHASE THE IMPROVEMENTS FOR $1 AT YEAR 30.

UH, AND THAT WAS FOR A 9% LITECH APPLICATION, WHICH WAS NOT AWARDED

[00:05:01]

CITY COUNCIL APPROVED A 75 YEAR LEASE WITH 75 YEARS OF AFFORDABILITY, UH, $2.25 MILLION CITY LOAN, UM, AND A CITY WITH, AND THAT ALSO INCLUDED A CITY OPTION TO PURCHASE THE IMPROVEMENTS FOR A HUNDRED DOLLARS AT YEAR 30.

UM, IT WAS ON APRIL 3RD, UH, JUST A TWO WEEKS AGO OR SO, UM, THAT THE CITY FOUND OUT, UH, THAT THE OPTION TO PURCHASE FOR A HUNDRED DOLLARS AT YEAR 30 WAS NOT GONNA BE, UH, ABLE TO BE IN THE LEASE.

UM, AND THAT THE OPTION TO PURCHASE WOULD HAVE TO BE AT A FAIR MARKET RENT.

IT WAS ON APRIL 15TH THAT THE CITY FOUND OUT, UM, THAT THE AFFORDABILITY PERIOD COULD NOT BE FOR 75 YEARS, UM, THAT IT WOULD HAVE TO BE ONLY FOR 30 YEARS.

UH, AND THEN IT WAS JUST ON FRIDAY, ON APRIL 23RD THAT THE CITY FOUND OUT THAT THE LEASE TERM HAD TO BE 99 YEARS INSTEAD OF, UH, 75 YEARS.

IN ORDER FOR THIS PROJECT TO GO FORWARD, UM, WE'VE, UH, THROUGH NO FAULT NECESSARILY OF THE DEVELOPER, UM, OR THE CITY, UM, IT'S JUST WHAT'S NECESSARY IN ORDER TO MAKE THIS LITECH DEAL WORK.

AND I WOULD ALSO ALSO NOTE THAT, UM, THE CITY, THE CITY'S TWO AND A QUARTER MILLION DOLLAR LOAN TO THE PROJECT AND THE GROUND LEASE, RIGHT, IS ONLY PART OF THE FUNDING FOR THIS PROJECT THAT CLOSE TO $20 MILLION IN OUTSIDE FUNDING SOURCES, UM, ARE BEING CONTRIBUTED AND INVESTED IN THE PROJECT FOR THE CITY OF SEDONA.

SO IT IS A PARTNERSHIP WITH, UH, A VARIETY OF INVESTMENT FUNDS.

OKAY.

WE HAVE ANY QUESTIONS FOR MEIS? BOY, DON'T EVERYBODY JUMP UP AT ONE TIME.

I, I HAVE A QUESTION.

VICE MAYOR.

DEVELOPER, DO YOU WANNA COME OVER HERE? OKAY.

I HAVE A COUPLE QUESTIONS IF YOU DON'T MIND.

I SAW YOU SHAKING YOUR HEAD A MINUTE AGO.

DID YOU, DID YOU HAVE SOMETHING THAT YOU WANTED TO SHARE ABOUT THE HISTORY THAT WE, THAT WASN'T ACCURATE? THAT WAS THE, THE WELL JUST FIRST INTRODUCE YOURSELF.

SO MY NAME'S, UH, MATT SCH MOCKER WITH HS DEVELOPMENT PARTNERS.

UM, YOU KNOW, WE'VE BEEN WORKING ON THIS FOR A, A VERY LONG TIME.

UM, WE'VE, YOU KNOW, ORIGINALLY SUBMITTED AS A 9% TAX, YOU MOVE THE TAX CREDIT PROJECT, UM, YOU KNOW, WITH DIFFERENT SYNDICATORS AT THAT POINT IN TIME.

UH, THE PROJECT, YOU KNOW, WAS A MUCH DIFFERENT PARAMETERS OF, UM, YOU KNOW, THE, THE AMOUNT OF TAX RATE EQUITY, IT'S A 9% OUT.

IT'S NOW WE HAD TO TURN IT TO A 4%.

UM, YOU KNOW, WE'VE WORKED THROUGH WITH THE CITY TO, YOU KNOW, MEET ALL THE DESIGN GUIDELINES.

UH, YOU KNOW, WE'VE RECENTLY GOT OUR BUILDING PERMITS ISSUED, AND THE, THE GROUND LEASE STRUCTURE, THE LEASES, UM, THEY'RE, THEY'RE VERY FLUID.

AND, YOU KNOW, I'VE, I'VE ALWAYS FELT THAT I'VE, YOU KNOW, PORTRAYED THIS TO, UM, I THINK SHANNON WHO WORKED HERE BEFORE, AND, UM, UM, KURT IN DIFFERENT TIMES.

AND EVEN IN THE ORIGINAL, YOU KNOW, THAT LEASE, I, I'VE MADE IT CLEAR, I HAVE EMAILS AND STUFF THAT SAY THAT, YOU KNOW, THESE ARE TYPICALLY 75 TO 99 YEARS AND THEY GET APPROVED.

UM, YOU KNOW, TOWARDS THE VERY END YOU HAVE TO MEET ALL THE IRS AND, YOU KNOW, REQUIREMENTS.

UM, YOU DON'T KNOW EXACTLY HOW THAT IS.

'CAUSE THERE'S ALL KINDS OF DIFFERENT MARKET FLUCTUATION FLUCTUATIONS, UM, IN THAT, TYPICALLY IN THESE SITUATION, THESE ARE, THESE LEASES ALWAYS MOVE.

AND, YOU KNOW, AT THE END OF THE DAY, WE, SOME WE DON'T HAVE CONTROL OVER THE LONG TERM, UM, AFFORDABILITY, YOU KNOW, TO TAKE IT OUT TO THESE, YOU KNOW, 99 YEARS.

BUT THERE'S ALL THESE DIFFERENT INCENTIVES THAT ARE SITTING THERE, LIKE THE CITY'S LOAN AND THE STATE'S LOAN TO KEEP IT GOING AFFORDABLE FOR YEARS AND YEARS AND YEARS, WAY PAST THE 30 YEARS.

I MEAN, TYPICALLY THESE DEALS, THEY GET SYNDICATED, EXTEND THE LEARN THE LOAN TERMS OUT.

LIKE IT'S, IF WE COULD PUT THAT ALL IN THE DOCUMENTS, WE WOULD, BUT IT'S A, IT'S THE OPINIONS THAT THE TAX CREDIT INVESTORS HAVE TO GIVE IN ORDER TO SELL THE CREDITS.

WE, WE DON'T HAVE CONTROL OF THAT.

WHAT WE CAN CONTROL IS THAT WE HAVE A PROJECT THAT'S READY TO GO.

WE HAVE 30 YEARS OF A HUNDRED PERCENT AFFORDABILITY WITH COMPLIANCE WITH HIGH QUALITY

[00:10:01]

THAT'S GONNA IMPACT AND CHANGE A LOT OF PEOPLE'S LIVES IN THE CITY OF SEDONA.

UM, AND THAT THERE'S ALL THESE DIFFERENT, YOU KNOW, THE CITY HAS TWO DIFFERENT OPTIONS AT TWO DIFFERENT TIMES.

AND BASICALLY, YOU KNOW, THROUGHOUT THE, HIS, THE WHOLE TERM OF THE PROJECT, I MEAN, WE'RE PARTNERS WITH YOU AND WE'RE, WE'RE, WE'RE IN THIS TO, TO KEEP AFFORDABLE HOUSING AND, AND TO PUSH IT.

I CAN'T CHANGE FEDERAL GUIDELINES.

IF I COULD, I WOULD, BUT I DON'T KNOW, MORE THAN I CAN GIVE YOU IS MY WORD.

I CAN'T SELL THIS PROJECT.

I HAVE PERSONAL GUARANTEES OUT THERE.

I TO, YOU KNOW, FOR THE NEXT 30 YEARS FOR COMPLIANCE AND EVERYTHING ELSE.

LIKE, I'M, I'M TIED TO IT.

SO I HAVE TO MAKE SURE THIS IS A SUCCESS.

IT'S A COMPLICATED PROJECT LIKE PROGRAM THAT WE HAVE TO USE.

AND, YOU KNOW, I KNOW THAT THERE'S GONNA BE A HUGE POSITIVE IMPACT ON PEOPLE'S LIVES.

'CAUSE I'VE SEEN IT HAPPEN OVER AND OVER AGAIN.

UM, YOU KNOW, I LIVED IN INNER CITY.

I GREW UP, YOU KNOW, GOING TO INNER CITY SCHOOLS, AND I'VE SEEN HOW HIGH QUALITY AFFORDABLE HOUSING CAN, CAN, CAN HELP PEOPLE.

IT CAN MAKE A HUGE DIFFERENCE.

AND THROUGHOUT MY TIME COMING HERE TO THIS BEAUTIFUL COMMUNITY THAT YOU HAVE, THERE'S SO MANY PEOPLE THAT I MEET THAT THEY DON'T HAVE HOUSING, THEY CAN'T WORK IN, LIVE IN THEIR COMMUNITY.

AND REALLY THAT'S WHAT THEY WANT.

THEY WANT TO STAY HERE.

I MEAN, THEY WANT TO BE PART OF IT.

UM, THEY WANT TO BE THE NEXT HOMEOWNERS, YOU KNOW, LIVING IN THAT STABLE HOUSING.

SO, YOU KNOW, I JUST, I I I, I LOOK FORWARD TO BEING YOUR PARTNER, NOT FOR THE NEXT 15 YEARS OR 30 YEARS, BUT, YOU KNOW, FOR THE NEXT 50 YEARS.

A HUNDRED YEARS.

UM, SO .

YEAH.

YEAH.

I MEAN, I'VE TOLD KURT, HE'S LIKE, WELL, IN, YOU KNOW, 15 YEARS, YOU WON'T BE SITTING HERE TALKING ABOUT THIS.

SO I WAS LIKE, ABSOLUTELY.

I PLAN TO BE, I'LL SIT RIGHT HERE IN THE SAME CHAIR.

AND YOU KNOW, THIS IS VERY IMPORTANT TO ME.

UM, YOU KNOW, IF I WANTED TO BE IN A DIFFERENT BUSINESS OR THE CONDO BUSINESS OR SOME OTHER THING, I WOULD BE IN THAT BUSINESS.

BUT I'M IN THE BUSINESS OF AFFORDABLE HOUSING.

AND, UM, YOU KNOW, I, I'M A RENTER TOO, SO, YOU KNOW, I UNDERSTAND.

AND, UH, LIKE THIS IS, THIS COULD BE A GREAT PROJECT FOR THE COMMUNITY.

AND I THINK IT'S ONE STEP TO, UH, YOU KNOW, POSSIBLY MORE.

AND I THINK THAT THE, THE, YOU KNOW, THE CITY, THIS IS, IT'S A VERY, YOU, THIS IS A VERY COMPLICATED PROJECT.

A LOT OF MOVING PIECES.

UM, WE'VE BROUGHT IT ALL TOGETHER, WE'VE COLLABORATED, WE'VE WORKED.

UM, SO I'M JUST, YOU KNOW, I, I HOOK FOR KIND CONSIDERATION AND, YOU KNOW, WE, WE PLAN ON CLOSING AND BREAKING GROUND IN TWO WEEKS, SO EVERYTHING ELSE IS READY TO GO.

I HAVE ANOTHER QUESTION FOR YOU.

SURE.

WE WERE TOLD INITIALLY THAT EVERYTHING, OR AT LEAST THIS IS THE WAY WE INTERPRET IT MM-HMM .

IT ALL BLEW UP ON APRIL 30TH.

IF THE DEAL, THE LEASE WASN'T APPROVED, WHAT IS THE ACTUAL REAL DATE? SHE'S TALKING ABOUT WHEN THE TERMS CHANGE.

OH, I'M, I APOLOGIZE FOR THAT.

UM, THE TAX CREDIT SYNDICATOR, SO WE HAVE TWO, TWO BIG THINGS.

SO OUR BONDS ARE GONNA EXPIRE, UH, ON WHAT DATE? I BELIEVE IT IS.

I'M SORRY.

I HAVE A LOT OF NUMBERS IN MY HEAD.

I I THINK IT'S IN ABOUT 60 DAYS.

SIX.

OH, THAT'S THE BONDS.

UM, OUR TAX CREDIT INDICATOR, THEY CAN'T KEEP THIS IN A FUND ANYMORE IF WE DON'T CLOSE IN THE NEXT TWO WEEKS TO 30 DAYS.

AND OUR CONSTRUCTION PRICING, WE HAVE IT LOCKED IN.

WE HAVE A CONSTRUCTION CONTRACT, YOU KNOW, OUR PRICES IS LOCKED IN.

IT'S PROTECTED.

LIKE WE, WE CAN'T UNDO THAT.

NOW.

THAT'S, THAT'S THE OTHER BIG THING.

WE ARE LOCKED IN.

WE HAVE EVERYTHING.

WE ARE READY TO GO.

SO IT, IT, LIKE THE EVERY DAY IS IMPORTANT, I'LL TELL YOU THAT EVERY DAY IS IMPORTANT AND WE'RE TRYING TO CLOSE AS QUICKLY AS WE CAN.

DO WE HAVE TWO WEEKS? YES.

YOU HAVE TWO WEEKS.

THANK YOU.

TO CLOSE, KATHY, ON THAT TWO WEEKS, YOU SAID THAT YOU WERE READY TO BREAK GROUND IN TWO WEEKS.

MM-HMM .

ARE THERE ANY FORESEEABLE DELAYS TO THAT OR I, I, I JUST WANTED, I WANNA KNOW MORE ABOUT THAT BEING A FIRM RIGHT.

DATE AND COMMITMENT.

SO, SO TH THIS, THESE PROJECTS, WE HAVE MULTIPLE LAYERS OF FINANCING, RIGHT? WE HAVE TAXES AND BONDS THAT ARE BEING ISSUED BY THE ARIZONA INDUSTRIAL AUTHORITY.

WE HAVE 4% CREDITS FROM THE ARIZONA DEPARTMENT OF HOUSING.

WE HAVE TAX CREDITS THAT ARE GETTING SOLD,

[00:15:01]

WE HAVE, UH, VARIOUS DIFFERENT COUNCILS OF TAX LAW, YOU KNOW, ON THE NATIONAL SIDE, NUMBER OF DIFFERENT ATTORNEYS.

ALL OF THAT IS BEING PACKAGED UP TOGETHER RIGHT NOW.

AND IT'S JUST, WE ARE, I I, I FEEL VERY, VERY CONFIDENT.

IT'S JUST A MATTER OF HUMAN CAPITAL AT THIS POINT IN TIME.

CAN WE HAVE THE, THE 50 TO 75 PEOPLE AND ATTORNEYS ALL GET TO THE LAST 1% OF IT? WE'LL BE READY TO GO.

WE'VE SET THE CLOSING DATE WITH OUR BIG CLOSING GROUP, WHICH IS ABOUT 75 PEOPLE ON CALLS FOR THE NINTH.

THAT'S A WEEK FROM FRIDAY.

AND WHAT HAPPENS IF IT WOULD SKIP? IT WOULD BE ONE WEEK BECAUSE OF JUST, JUST, I DON'T KNOW, JUST SOMETHING GENERAL.

BUT IT'S, I DON'T EXPECT IT.

I MEAN, I LEAVE HERE RIGHT NOW, TOMORROW MORNING, I GET BACK ON A FLIGHT AND I'M WORKING, YOU KNOW, TO CLOSE THIS.

I'VE WORKED EVERY WEEKEND THE PAST THREE MONTHS.

LIKE, I DON'T, THIS IS ALL I FOCUS ON RIGHT NOW.

SO, AND IF ONE OF THOSE PIECES OF THAT PUZZLE DON'T YEAH.

COME TOGETHER, WHAT HAPPENS TO THE REST OF THE PIECES OF THE PUZZLE? I MEAN, IS YEAH, YEAH.

UNDERSTAND.

THAT'S A GOOD QUESTION.

ALL THE PIECES ARE THERE AND FULLY COMMITTED.

IT'S, IT'S NOT A MATTER OF THE PIECES AREN'T THERE, IT'S JUST PACKAGING UP STACKS OF PAPER LIKE THIS INTERTWINE AND JUST WRAPPING IT ALL TOGETHER.

THAT'S, THAT IS WHERE WE ARE AT THIS POINT.

WE HAVE OUR PERMITS.

THAT'S ONE OF THE HUGE MILESTONES.

I PICKED THEM UP LAST WEEK WHEN I WAS HERE.

OUR CONTRACT IS SIGNED, UH, WE'RE FINISHING THE LAST, YOU KNOW, PAPERWORK WITH THE STATE, UH, THE GROUND LEASE STUFF WITH KURT AND JEANNIE.

UM, YOU KNOW, EVERYTHING ELSE IS SURVEY TITLE.

ALL OF THAT WORK IS, IS COMING TOGETHER.

WE'RE WORKING ON THE CLOSING STATEMENTS.

I MEAN, UH, THE BOND ISSUANCE.

I MEAN, IT'S, IT'S, IT'S, WE'RE, WE'RE RIGHT THERE AT THE FINISH LINE.

AND, AND, AND WHEN YOU, IN THE, IN THE ANSWER YOUR OTHER QUESTION, THE WAY THESE DEALS WORK IS EVERYTHING HAS TO BE CLOSED.

MM-HMM .

EVERYTHING HAS TO BE SECURED.

AND YOU BASICALLY GIVE A NOTICE FOR SEED TO START CONSTRUCTION THE NEXT DAY.

SO THERE'S NO LOOSE ENDS.

THAT'S, AND FROM THE POINT THAT CONSTRUCTION COMMENCES, WHAT IS YOUR TIMELINE TO COMPLETION? 12 MONTHS.

THANK YOU.

OKAY.

ANY OTHER QUESTIONS? DEREK? UM, I UNDERSTAND THAT AT SOME POINT THE REQUEST WAS MADE THAT AT THE END OF THE AFFORDABILITY PERIOD, THE RENT ON THE GROUND LEASE WOULD RESET TO MARKET.

UM, WHY, WHY CAN THAT NOT NOT HAPPEN? WE'RE TOLD THAT THAT'S NOT AN OPTION.

CAN YOU EXPLAIN THAT FOR US? THAT IS 100% A COMPLIANCE ISSUE WITH THE TAX OPINION.

THAT'S E FOR SECTION 42, THE CODE TO JUSTIFY THOSE TAX CREDITS THROUGH THE ANALYSIS THAT THE TAX CREDIT INVESTOR DOES.

IT'S, IT'S THE PRO THE PROJECT CAN SUPPORT THE RENT.

WHAT IT IS IN THE FUTURE THAT, THAT RENT, WE HAVE NO PLAN TO TAKE IT TO, TO MARKET OR, I MEAN, WE, WE CAN'T, WE'RE GONNA BE IN THIS FOR MUCH LONGER THAN BE BEFORE.

PROBABLY ALL OF US ARE HERE.

THERE'LL STILL BE A PROJECT MOVING, IT'S AGAINST THE CODE BECAUSE THEN IT BREAKS WHAT IS LOOKED AT AS A GENUINE, UH, TAX BENEFITS OF THE CREDITS.

SO IT IT'S PROJECT BASED, IT'S BASED ON THE NUMBERS OF CORRECT.

CORRECT.

YES.

CAN YOU HEAR WHAT YOU SAID? SORRY? I SAID THAT IT WAS PROJECT BASED, THAT THAT ANALYSIS IS BASED ON THE, THE NUMBERS OF THIS SPECIFIC UNIQUE PROJECT.

AND THIS IS UNIQUE BECAUSE IT'S SUCH A LOW NUMBER OF UNITS, RIGHT? WELL, THEY ARE.

EVERY PROJECT IS UNIQUE.

WELL, I KNOW, BUT THIS IS ULTRA UNIQUE.

IT'S EXTRA CHALLENGING BECAUSE IT'S 30 UNITS, MOSTLY ONE BEDROOMS. UH, AND, AND THE, UM, YOU KNOW, WE, WE HAVE, WE HAVE 60% RENTS.

IT'S YAVAPAI COUNTY RENTS.

IT MIGHT SEEM LIKE THE RENTS IN SEDONA WOULD BE HIGHER, BUT WE STILL HAVE TO GO TO AREA MEDIAN INCOME.

UM, SO I MEAN, THERE'S A LOT OF, UH, YOU KNOW, THE, THE COST TO BUILD THE MARKET STUDIES, THE ARCHITECTS, THE ENGINEERS LIKE THOSE, THOSE COSTS DON'T LOOK AT IT AS AFFORDABLE OR MARKET RATE.

THE COSTS ARE STILL WHAT THEY ARE.

AND SO THAT'S WHY IT TAKES ALL THESE FUNDS.

AND, UM, IT, IT'S, IT'S JUST, IT ALL COME THAT YOUR QUESTION, UH, COMES ALL DOWN TO THE TAX OPINION THAT THEY HAVE TO GIVE.

[00:20:02]

SO YOU GOOD DEREK? YEAH, PETE, NO QUESTIONS AND NOTHING ON THIS SIDE.

OKAY.

ANY COMMENTS? OKAY.

DO WE HAVE A MOTION? I'M SORRY, TARA.

I WANT TO SUPPORT THIS PROJECT.

WE NEED AFFORDABLE HOUSING.

DESPERATELY.

I APPRECIATE THE EFFORT THAT JEANIE, KURT, AND EVERYONE ELSE HAVE PUT INTO THIS, BUT I, I'D LIKE TO HEAR FROM THE OTHER COUNSELORS, BUT I, I JUST, I DON'T THINK I CAN SUPPORT THIS.

I MEAN, THE, ESPECIALLY THIS, THE, AT THE, YOU KNOW, WE STARTED WITH THE BENEFIT TO THE CITY WAS GONNA BE THIS, AND FOR YEARS, HOWEVER LONG THIS WENT ON BEFORE I WAS ON COUNCIL, YOU KNOW, THE EXPECTATION WAS THIS.

AND THEN IN THE LAST FEW MONTHS, IT'S JUST SORT OF BEEN WHITTLED DOWN TO NOW WE'RE GETTING THIS, AND I JUST, THAT DOESN'T SIT RIGHT WITH ME.

UM, SO I, I WOULD DEFINITELY LIKE TO HEAR WHAT MY OTHER, MY COLLEAGUES HAVE TO SAY ABOUT THIS, BUT I JUST, I HAVE CONCERNS THAT THIS PROJECT HAS JUST GOTTEN WORSE AND WORSE DEAL FOR THE CITY.

SO I'M PROBABLY GOING TO VOTE NO ON WHATEVER WE'RE LOOKING AT.

SO, PETE, THANK YOU, MAYOR.

MY COMMENTS PROBABLY AREN'T TOO FAR FROM WHERE, UH, COUNCILOR FAF STARTED.

I DON'T KNOW THAT I ENDED UP IN THE SAME PLACE THOUGH.

I, MATT AND I, AND, AND, UH, APPRECIATE ALL THE WORK THAT YOU AND YOUR TEAM HAVE PUT INTO.

AND EVERYONE OUT THERE, I'M SURE THERE'S 30 LAWYERS OR MORE YEAH.

HAVE ALL WORKED ON THIS STUFF A LOT.

BUT, YOU KNOW, THIS IS MY FIRST TIME GOING THROUGH A PROJECT LIKE THIS, AND IT'S THE CITY'S FIRST TIME GOING THROUGH IN A LI TECH PROJECT, AND LOTS HAVE MOVED AT THE LAST MINUTE.

AND THAT SORT OF JUST MADE ME UNCOMFORTABLE.

AND THAT MIGHT BE NORMAL.

UH, I DON'T KNOW.

UH, I, IT, IT, IT DOES SEEM, YOU KNOW, BECAUSE OF OUR LACK OF EXPERIENCE AND OUR RELIANCE ON, UH, LEGAL OPINIONS FROM OTHER ADVISORS IN THIS PROCESS THAT AREN'T WORKING FOR US AND DON'T HAVE, YOU KNOW, OUR BEST INTEREST COMPLETELY AT HEART.

SO I THINK WHERE I LAND IS, I THINK I'M BEGGING FOR TWO MORE WEEKS TO SEE IF WE CAN GET SOME OUTSIDE INDEPENDENT ADVICE OF LOOKING AT THIS DEAL AND GIVEN THE CITY SOME, UH, EXPERIENCED ADVICE THAT PERHAPS IT DOESN'T HAVE IN ITS OWN POCKET.

LEGAL ADVICE, I THINK MOSTLY IS, IS WHERE MY HEAD'S AT.

BUT, YOU KNOW, LOOKING AT THE STRUCTURE OF THE DEAL AND GIVING ME A LITTLE BIT MORE CERTAINTY SINCE I HAVEN'T SEEN IT BEFORE, UH, UH, THAT'S MY COMMENT THERE.

AND MATT, YOU WERE ABOUT TO, YOU, YOU, YOU WERE GONNA REACT TO THAT IN A WAY.

SO I'M GONNA GIVE YOU THAT CHANCE.

I APPRECIATE IT.

UM, THE, WE, WE, WE'VE, WE'VE NEVER CHANGED THE UPFRONT PAYMENT.

WE'VE NEVER CHANGED THE GROUND LEASE PAYMENT.

UM, THE LEASE HAS ALWAYS BEEN IN A RANGE OF 75 TO 99 YEARS.

IT'S THE AFFORDABILITY THAT WAS TAKEN OUT OF OUR CONTROL.

UM, YEAH.

AND, AND I, I APPRECIATE THAT.

FROM YOUR STANDPOINT, I'M HEARING FROM SOME OUR ADVICE THAT THERE'S OTHER DEALS OUT THERE WHERE 30 YEARS IS, YOU KNOW, THAT'S SORT OF THE MINIMUM, UH, DEAL.

IT COULD BE LONGER THAN THAT.

AND I'D LIKE TO HEAR FROM, AND THAT IS 100% A A FUNCTION OF IT.

IT'S A 30 UNIT DEAL THAT HAS 4% CREDITS WITH, YOU KNOW, TWO PIECES OF, YOU KNOW, SUBORDINATE DEBT.

BUT THAT'S THE ONLY WAY TO MAKE THE, A PROJECT HERE WORK.

AND I, I APPRECIATE YOUR STATEMENT ABOUT THAT.

I, I, WHAT I'M SAYING IS, I, I WOULD JUST FEEL BETTER IF I HAD SOME INDEPENDENT VIEW OF THAT, THAT WOULD SAY, YEAH, MATT'S ABSOLUTELY RIGHT.

I'VE SEEN A HUNDRED OF THESE DEALS.

THIS IS THE FIRST 30 UNIT ONE AND A 4% LITECH.

AND, YOU KNOW, THIS IS A GREAT DEAL.

BUT I DON'T HAVE THAT FROM SOMEBODY WHO DOESN'T HAVE A STAKE IN THIS GAME YET, KATHY.

SO I, I SHARE MY COLLEAGUE'S CONCERN ABOUT THE MOVING PIECES OF THIS AND THE LATE DATE AND THE PRESSURE THAT THAT BRINGS, WHICH I THINK THIS IS NOT A SMALL FINANCIAL COMMITMENT ON THE PART OF THE CITY, AND IT'S CERTAINLY NOT A SMALL, UM, EMOTIONAL AND QUALITY OF LIFE INVESTMENT.

AND WE REALLY WANT TO PROVIDE, UH, UH, UM, HOUSING OPPORTUNITIES THAT DON'T CURRENTLY EXIST.

I MEAN, WE'VE GOT LESS THAN 5% OF SEDONAS HOUSING STOCK, YOU KNOW, IN APARTMENTS.

SO THIS IS SOMETHING THAT'S HEARTFELT.

IT'S BEEN A PRIORITY UP HERE FOR I THINK EVERYBODY ON THE DAY, UH, OVER THE YEARS NOW.

[00:25:01]

WHAT I'M WORRIED ABOUT IS, IS WITH THIS NOT GIVING THE SAME TERMS TO THE CITY, THAT THERE MIGHT BE A FUTURE RESPONSIBILITY FOR THE CITY, WHOEVER THE CITY IS AT THAT POINT, RIGHT? IN TERMS OF THE DAY IS HERE, AND IN TERMS OF RESIDENTS, UH, TO BE HAVING TO HAVE A FINANCIAL, AN ADDITIONAL FINANCIAL CONTRIBUTION.

AND I THINK WE NEED TO CONSIDER THAT IT'S A, IT'S SOMETHING, IT'S A RESPONSIBILITY THAT WE HAVE TO THINK ABOUT.

UM, I WOULD LOVE TO DO ANYTHING TO, TO GET HOUSING GOING AND GROUNDBREAKING WE'VE BEEN TALKING ABOUT FOR YEARS.

IT'S ALWAYS BEEN A PRIORITY OF MINE.

I, I THINK I NEED SOME WAYS TO MAKE SURE THAT I CAN RESPONSIBLY DO THAT, SUCH AS HOW ARE WE GOING TO TAKE OFF A FUTURE BURDEN BY PERHAPS CONTRIBUTING MORE TO HOUSING FUND, YOU KNOW, IN THE NEXT FEW YEARS AGAINST ANY POTENTIAL FUTURE BURDEN.

THAT'S SOMETHING WE NEED TO THINK ABOUT, BUT WE HAVEN'T HAD AN OPPORTUNITY TO THINK ABOUT THAT.

SO, I MEAN, I HATE KICKING THE CAN DOWN THE ROAD ON THIS, BUT I THINK THAT THERE IS SOME RESEARCH THAT COULD BE DONE IN THOSE AREAS OVER THE NEXT TWO WEEKS.

UM, I DON'T WANNA SEE THIS FALL APART.

I REALLY DON'T WANNA SEE THIS FALL APART.

I, MY HEART SO WANTS TO SUPPORT THIS, BUT I THINK I, I HAVE TO BE RESPONSIBLE IN HAVING THOSE PIECES LINED UP IN ORDER TO BE ABLE TO, TO PULL THE TRIGGER ON THAT YES.

VOTE.

SO, UM, THOSE ARE MY THOUGHTS AT THE MOMENT.

I STILL DON'T KNOW IF EMOTION COMES FORWARD TONIGHT.

IT MAY, IT MAY NOT.

I DON'T KNOW.

I, I, I DON'T KNOW UNTIL THAT LAST MINUTE HOW I'LL ACTUALLY VOTE.

SO THANK YOU FOR HEARING ME OUT.

OKAY.

ANYTHING FROM, FROM MY RIGHT BRIAN? I THINK HE WANTED TO RESPOND.

OH, GO AHEAD.

NO, I, I, I, I UNDERSTAND WHAT, WHAT YOU'RE SAYING.

UM, YOU KNOW, LIKE I SAID, EVERY DAY IS CRITICAL, UM, IN, YOU KNOW, GETTING ADVICE FROM OUTSIDE COUNSEL, WHICH WE, WE, WE'VE OFFERED, WE'VE HAD, THERE'S DOZENS OF ATTORNEYS THAT ARE EXPERTS IN THIS THAT, YOU KNOW, WE'VE HAD CONVERSATIONS WITH.

THEY'RE NOT GONNA SAY ANYTHING DIFFERENT.

THESE ARE THINGS THAT ARE, THAT IT'S, IT'S THIS PROJECT OR ANY PROJECT, UM, WITH SOME OF THESE VARIABLES THAT JUST, THEY WON'T, IT WON'T CHANGE DOWN THE ROAD.

THEY'RE NOT GONNA BE ABLE TO CHANGE THE OPINION, UH, ON THE AFFORDABILITY.

THEY'RE NOT GONNA BE ABLE TO CHANGE THE GROUND LEASE.

I HAVE ONE FOLLOW UP YEAH.

TO MY COMMENTS BASED ON THAT, WHICH IS, OKAY, WE TALKED ABOUT, WE WERE UNDER THE IMPRESSION, AT LEAST I WAS UNDER THE IMPRESSION, I CAN ONLY SPEAK FOR MYSELF THAT THERE WAS A DROP DEAD DATE.

WE TALKED ABOUT THAT A LITTLE BIT IN THE QUESTIONS THAT CAME OUT BEFORE.

UM, I NEED TO KNOW WHAT THAT DATE REALLY IS, BECAUSE I NEED TO KNOW IF WE'RE REALLY TALKING ABOUT HAVING THE TIME TO, TO DO THIS KIND OF, AND, AND IT 100%, I DON'T KNOW IF THERE IS THE TIME TO GO THROUGH ANOTHER TWO WEEKS AND THEN PICK IT UP AGAIN BECAUSE I, THE, I HAVE TO GET EVERYONE, THERE'S 75 PEOPLE THAT ARE WORKING TO GET THIS TOWARDS A, A, A CLOSING AND THEY'RE, THEY'RE GOING TO, UM, I MEAN I, I, I'M, I'M WILLING TO BUY ANY TIME THAT I CAN.

I JUST DON'T WANT, UM, IT, IT, IT, AT A CERTAIN POINT THE FUNDS ARE JUST GONNA, THE, THE TAX CREDIT INVESTORS GONNA SAY WE CAN'T CHANGE THIS AND THIS, THESE ARE FEDERAL OPINIONS.

LIKE WE HAVE TO BE COMPLIANT WITH FEDERAL BANKING LAWS.

UM, LET ME ASK YOU THIS WAY, THIS IS AS SPECIFIC AS I CAN GET.

IF THERE WAS A MOTION TO TABLE AND THERE WAS A MOTION TO TABLE THIS FOR MORE DUE DILIGENCE AND THE DATE OF THAT WAS, YOU KNOW, LET'S SAY, I DON'T KNOW, THURSDAY THE 15TH, IS THAT TOO LATE? I, I WOULD WANT IT TO BE SOONER.

OKAY.

WOULD I'LL DO ANYTHING THAT YOU NEED.

WOULD A DATE OF LIKE THE 12TH BE TOO LATE? I'M TRYING TO GET TO A CERTAIN DATE HERE SO I CAN UNDERSTAND WHAT WE HAVE TO WORK WITH.

'CAUSE I, THE DATE, LIKE A LOT OF OTHER THINGS HAVE BEEN MOVE HAS BEEN A MOVING TARGET MONDAY, FRIDAY, THIS FRIDAY.

Y YES.

WHAT, WHAT? IT DEPENDS.

WHAT INFORMATION DO YOU NEED? WELL, I GUESS IS WHAT MY QUESTION IS.

OKAY.

TO BE BLUNT, MM.

WE'VE HAD NOW, WE HAVEN'T HAD ANY OF THIS INFORMATION

[00:30:01]

THE RUG PULLED OUT FROM UNDERNEATH US IN THE PAST MONTH ON THIS WHERE THINGS HAVE CHANGED.

WE, DUE TO THE NEGOTIATION POINTS, I'M SURE IT'S NOT THE INTENT, BUT TO ME IT FELT LIKE IT WAS SOMEBODY WAS NOT YOU, BUT SOMEBODY UP THERE IS NEGOTIATING IN BAD FAITH BECAUSE THEY WEREN'T GIVING US A LOT OF INFORMATION 18 MONTHS AGO WHEN WE STARTED, WE HAD A TOTALLY DIFFERENT PICTURE OF WHAT THIS WAS TO DEAL WITH LITECH 18 MONTHS AGO WHEN IT'S NOT, CERTAINLY NOT WHAT WE'RE GETTING NOW.

SO WE'RE ALL PERPLEXED.

WE ALL WANT TO SEE HOUSING MOVE FORWARD.

UH, AND THAT'S NOT EVEN A QUESTION.

WE ALL, YOU KNOW, ARE ON THE SAME PAGE WITH THAT.

IT'S ABOUT NEGOTIATING A GOOD FAITH.

AND AGAIN, IT'S NOT FROM YOU AND YOUR COMPANY, BUT I MEAN, I HAVE MY OWN COMMENTS I'M GOING TO ADDRESS, BUT THAT'S WHAT THE, THE ISSUE IS.

SO IF YOU CAN GIVE US A BETTER DATE INTO THIS WEEK OF THE 12TH, UH, THAT MIGHT BE BETTER.

AND THEN WE CAN, KURT, DO YOU HAVE ANY OPINION ON GOING OUT TO SOME OTHER ADVISORY, EVEN IF IT'S NOT GONNA CHANGE THE INFORMATION GOING FORWARD, BUT MAYBE MAKE THE COUNCIL A LITTLE BIT MORE COMFORTABLE AND, UH, MAKE A DECISION? ASSUMING THAT WOULD MAKE EVERYBODY MORE COMFORTABLE? I DON'T KNOW AT THIS POINT.

UH, JEANNIE AND I ARE HAPPY TO, UH, WORK TO FIND ANOTHER OPINION FOR CITY COUNCIL.

UM, AS FAR AS THE THE LEGAL TERMS, THOSE ARE PRETTY MUCH SET AND THEY CAN'T CHANGE, UH, AS MATT SAID, RIGHT? SO THERE'S NOT ANYTHING, THEY'RE EITHER TAKE HIM OR LEAVE HIM AT THIS.

WE NEGOTIATED HEAVILY OVER THE LAST MONTH TO GET THE BEST OF THE CITY CAN GET.

AND UH, MATT TRIED TO BE FLEXIBLE AS THE DEVELOPER COULD BE, BUT BECAUSE OF TAX CREDIT AND BOND INVESTOR COUNCILS, THIS IS, THIS IS WHAT WILL WORK FOR THIS PROJECT.

SO, UM, THE ADVICE WOULD BE MORE ON THE, ON THE BUSINESS SIDE, I, I IMAGINE MM-HMM .

AS TO WHETHER OR NOT, UH, THIS IS THE BEST DEAL THE CITY CAN GET.

BUT THE TERMS ARE, WHAT THE TERMS ARE, I DON'T THINK THERE'S A LOT OF ROOM LEFT.

I DID JUST WANNA ADD THAT I'VE NEVER HEARD IT CALLED A 75 TO 99 YEAR LEASE BEFORE.

UM, NEITHER HAVE I, IT'S ALWAYS JUST BEEN A 75 YEAR LEASE.

AND, UH, MATT EVEN SAID ON THIS MORNING THAT FRIDAY WAS THE FIRST TIME HE HEARD THAT IT WAS GONNA BE A 99 YEAR LEASE.

UH, INSTEAD OF THE SAME TIME WE FOUND OUT THERE'S GONNA BE A 99 YEAR LEASE IS WHEN HE FOUND OUT IT WAS GONNA BE A 99 YEAR LEASE INSTEAD OF THE 75 YEAR LEASE.

KURT, CAN I ADDRESS THAT? YEAH, I I, I HAVE, I HAVE EMAILS BACK WITH SHANNON FROM MORE THAN A YEAR AGO SAYING THESE HAVE TO BE BETWEEN 75 AND 99 YEARS.

AND SHE, AND SHE HAD NO OBJECTION TO THAT.

AND I SAID IT, AND I EVEN PUT IN THERE, WE HAVE TO HAVE, UH, FINAL SIGN OFF ON TAX CREDIT OPINION COUNSEL TO DETERMINE THOSE DATES.

NOW RAYMOND JAMES HAS BEEN DOING A LOT OF WORK TO KEEP THAT 75 YEAR GROUND LEASE, BUT THEY, THEY JUST COULDN'T DO IT AT THE END.

LIKE THEY JUST COULDN'T.

YEAH.

AND THEY'VE BEEN TRYING, AND I, I THOUGHT THEY WOULD BE ABLE TO GET TO THE 75 AND I JUST FOUND OUT WHEN YOU FOUND OUT THAT THEY COULD ONLY DO THE 99.

I KNOW.

SO WE'RE IN AGREEMENT.

WE ALL FOUND OUT ON FRIDAY THAT THIS WILL BE A 99 YEAR LEASE.

AND, AND THAT'S WHERE I WAS GETTING TO WITH THE BAD FAITH BECAUSE THAT 99 YEAR LEASE I'M SURE WAS OUT THERE, BUT WE DIDN'T KNOW.

YOU DIDN'T EVEN KNOW.

SO THAT'S WHAT ME PERSONALLY, I WAS STARTING TO FEEL THAT SOMEBODY WAS HOLDING BACK INFORMATION FROM US AND IT REALLY MAKES IT, THE DECISION FOR US MUCH MORE CHALLENGING.

CAN I ASK A QUESTION? YEAH.

IS THE MIX OF UNITS AND THE DIFFERENT A MI LEVELS FOR THE DIFFERENT UNITS, IS THAT AN IMPACT? BECAUSE IT, I MEAN, IF WE HAD MORE 80%, WOULD IT MAKE A DIFFERENCE OR 60% WOULDN'T MAKE ANY DIFFERENCE? NO, NOT, NOT, NOT MATERIAL LONG.

OKAY.

MATERIALLY ENOUGH.

THANK YOU.

YEAH.

FOR THIS ONE, FOR THIS PROJECT.

YEAH.

YEAH.

SO, ALRIGHT.

I WAS ASKING BRIAN IF YOU HAD ANY CLOSING OR PARTING WORDS.

EVERY CONCERN SHARED THUS FAR? I SHARE WITH MY FELLOW COLLEAGUES AND FROM A STRAIGHT BUSINESS PERSPECTIVE, HAVING TERMS CHANGE THIS DYNAMICALLY AND UNFORTUNATELY NEGATIVELY, UH, RIGHT UP TO THE LAST MINUTE IS REALLY UNPALATABLE.

UM, THAT SAID, I THINK THAT WE ARE WASTING TIME AND PUTTING THE PROJECT AT RISK TO GO AND SEEK ADDITIONAL CONSULTATION ABOUT THIS.

THE TERMS ARE NOT GOING TO CHANGE.

WE'RE GONNA GET TOLD.

[00:35:01]

THAT'S WHAT WE'RE GOING TO HEAR.

I REALLY BELIEVE THAT.

AND SO I THINK WE ARE WASTING TIME AND IT'S NOT A GOOD USE OF ANYBODY'S RESOURCE TO SAY, LET'S GO GET YET ANOTHER PERSON'S OPINION ON THIS.

I THINK THAT IF GIVEN THE OPPORTUNITY, I'LL MAKE THE MOTION TO APPROVE THIS RESOLUTION AND I DO IT, I IS EXTREMELY WIDE OPEN THAT I THINK THAT AT THE 15 YEAR POINT WE WILL WANT TO HAVE RESERVE SUFFICIENT FUNDS FOR A PROJECT BUYOUT.

AND I DON'T LIKE THAT.

I REALLY DON'T, I DON'T WANT TO DO THIS AGAIN.

UM, BUT IT IS WHAT IT IS AT THIS POINT.

AND I THINK THAT GETTING A PROJECT DONE AND, AND I'M NOT DESPERATE TO GET A PROJECT DONE, BUT LIKE IF WE DELAY THIS, IF WE KILL THIS, WE'RE STILL GONNA WIND UP SPENDING AS MUCH MONEY ONE WAY OR ANOTHER, UH, TO GET SOMETHING DONE.

AND IT'S JUST GONNA TAKE LONGER.

SO I JUST DON'T SEE THE BENEFIT OF KICKING THE CAN DOWN THE CURB.

UM, AND I THINK I HAVE NOW GONE FULL CIRCLE.

THANK YOU MAYOR.

THANK YOU BRIAN.

MELISSA.

SO I HAPPEN TO AGREE THIS IS, YOU KNOW, FROM THE FINANCIAL SIDE, THIS FEELS LIKE NOT A GREAT DEAL.

IT JUST, IT JUST, IT DOESN'T, HOWEVER, UM, WE ARE LIVING IN UNCERTAIN ECONOMIC TIMES.

WE HAVE, TO MY UNDERSTANDING, WE HAVE BONDS INVOLVED, WE HAVE TAX CREDITS INVOLVED AND WE ALL KNOW THESE ARE PRETTY UNSTABLE MARKETS AT THE MOMENT.

AND THAT'S GOING TO MAKE PEOPLE WHO ARE INVESTING FEEL VERY LEERY ABOUT SHORT PERIODS OF TIME.

EVEN THOUGH FOR US 75 YEARS IS FOREVER, UM, UH, 99 FEELS UNREASONABLE.

BUT THEY'RE, THEY'RE LOOKING AT IT SOLELY FROM THEIR PERSPECTIVE OF MAKING SURE THAT THEY WILL GET WHAT THEY NEED BACK IN UNCERTAIN ECONOMIC TIMES.

I AGREE WITH BRIAN AND PUTTING THIS OFF IS JUST GONNA COST US MORE IN THE LONG RUN.

IT'S GONNA COST US MORE IN MATERIALS, IT'S GONNA COST US MORE IN PEOPLE LABOR.

IT'S GONNA COST US MORE IN FINDING PEOPLE WHO WILL DO DEVELOPMENT, NONE OF WHICH MAY END UP BEING AFFORDABLE.

UM, WHETHER YOU'RE LOOKING AT ESSENTIAL WORKERS OR WHETHER YOU'RE LOOKING AT CRITICAL WORKERS.

SO, UM, I I'M NOT IN FAVOR OF THE TERMS, BUT THEY ARE WHAT THEY ARE.

THEY'RE LEGALLY CORRECT.

I'VE HEARD MULTIPLE TIMES IN THE COURSE OF THE LAST TWO SESSIONS AROUND HOW PEOPLE HAVE LOOKED AT THIS.

THIS IS WHAT PEOPLE DO, THIS IS, THIS IS, THIS IS, AND IT'S THAT THE LEGAL TERMS WILL NOT CHANGE.

IT'S ABOUT WHETHER OR NOT WE BELIEVE WE WANT TO HAVE A VERY SMALL UNIT BUILT 30 UNITS.

IT'S A VERY, VERY SMALL PROJECT FROM EVERYTHING THAT I'M LEARNING.

AND, YOU KNOW, WE COULD DECIDE TO KILL THIS AND THEN TRY TO GET A NON-LINE TECH, BUT WHO KNOWS HOW LONG THAT'LL TAKE AND HOW MUCH THAT WILL COST US.

IT JUST FEELS LIKE IF WE WANT TO GET SOMETHING DONE, WE WANT TO GET SOMETHING BUILT IN THE NEXT YEAR OR SO.

THIS IS, THIS IS OUR DEAL.

AND SO I I WOULD STAND, UM, IN FAVOR OF SAYING EA ON A, A MOVE TO GO FORWARD, VICE MAYOR.

I DON'T SEE WHY ANOTHER WEEK I NEED SOMEBODY TO TELL ME TO MOVE FORWARD ON THIS DEAL.

NOBODY HAS GIVEN ME THE ASSURANCES THAT I NEED THAT I FEEL AS A ELECTED OFFICIAL IN THIS TOWN, I HAVE AN OBLIGATION TO THIS CITY, AN OBLIGATION TO ENTER INTO DEALS THAT ARE GOOD FOR THE CITY.

THIS IS NOT A GOOD DEAL FOR THE CITY.

IT'S NOT A GOOD FINANCIAL DEAL, NOT A GOOD LEGAL DEAL.

I DO UNDERSTAND THE PERSPECTIVE AND I APPRECIATE THE PERSPECTIVE THAT IT COULD BE A GOOD DEAL FOR THE 30 RESIDENTS WHO WOULD LIVE THERE.

AND THAT'S IMPORTANT FOR 30 YEARS.

FOR 30 YEARS, YES, FOR 60 YEARS.

BUT, YOU KNOW, IT WAS 30 YEARS WITH 75 YEAR GROUND LEASE.

NOW IT'S 30 YEARS WITH A 99 YEAR GROUND LEASE.

IT WAS BUY IT FOR A DOLLAR AFTER THE AFFORDABILITY PERIOD.

NOW IT'S BUY IT FOR

[00:40:01]

AND WE DON'T EVEN UNDERSTAND HOW THAT WOULD BE DETERMINED.

SO I DON'T THINK THAT THE, THAT THE TERMS ARE THE TERMS, I DON'T, BECAUSE WHAT WAS AGREED TO AT ONE POINT WAS NOT AGREED TO.

AND ANOTHER POINT, I DON'T UNDERSTAND WHY IT CHANGED, IT'S STILL NOT IN A FORM THAT COULD ACTUALLY BE SIGNED BECAUSE THERE'S STILL OUTSTANDING ISSUES THAT HAVE NOT BEEN RESOLVED.

I NEED SOMEBODY TO SAY TO ME THAT I'M NOT ABROGATING MY FISCAL RESPONSIBILITY BY GOING INTO THIS DEAL.

AND I NEED SOMEBODY I CAN TRUST WHO'S WORKING FOR THE CITY OF SEDONA, NOT WORKING FOR YOU, NOT WORKING FOR YOU, BUT WORKING FOR THE CITY OF SEDONA.

AND WE DON'T HAVE THAT AT THE MOMENT.

SO I DON'T SEE WHY WE CAN'T IN ONE WEEK OR 10 DAYS TRY TO GET THAT OPINION GIVEN TO US SO THAT PEOPLE HERE WHO IF THEY HAD TO VOTE TODAY, MIGHT VOTE NO, COULD PERHAPS VOTE YES.

'CAUSE THEN WE WOULD UNDERSTAND THAT THIS IS THE BEST DEAL THAT WE CAN GET.

AND THEN WE WOULD NEVER ENTER INTO ONE OF THEM EVER AGAIN BECAUSE THEY'RE TERRIBLE, TERRIBLE FOR US.

SO I WOULD SUPPORT A DELAY TO GET AN OPINION FROM A THIRD PARTY.

AND THERE ARE THOSE PEOPLE WHO UNDERSTAND LITECH AND WE DON'T, THIS IS OUR FIRST DEAL AND WE HAD COMPLETELY DIFFERENT EXPECTATIONS AND NOW WE'RE HAVING TO TRY TO, YOU KNOW, PUT A FINGER, GETS TO OUR NOSE AND SAY, OOH, WE WANT, WE WANT A HOUSING PROJECT.

I I JUST CAN'T DO THAT.

I CAN'T DO THAT UNLESS SOMEBODY WHO IS EXPERIENCED WOULD SAY, NOW LEGITIMATELY THEY CHANGE THIS TERM BECAUSE IT'S A COMPLIANCE ISSUE.

BUT I DON'T KNOW THAT AT THIS POINT BECAUSE I DON'T UNDERSTAND WHO'S DRIVING THE BUS HERE.

I DON'T UNDERSTAND WHO'S NEGOTIATING, WHO IS APPROVING AND AGREEING TO ONE THING AND THEN SOMEBODY ELSE IS AGREEING TO SOMETHING ELSE OR TELLING US WE CAN'T HAVE WHAT WE THOUGHT WE HAD NEGOTIATED.

IT HAS NOT BEEN A CLEAN DEAL AND WE'RE ALL UNCOMFORTABLE WITH IT.

EVEN THOSE WHO MIGHT WANNA VOTE YES IF YOU HURT, EVERYBODY ARE NOT COMFORTABLE WITH THIS DEAL .

SO I TOO AM UNCOMFORTABLE WITH THE DEAL IMMENSELY.

BUT I FEEL THAT, AND YOU'VE SAID IT, KURT SAID IT, IT, THE INFORMATION'S NOT GONNA CHANGE.

I JUST FEEL THAT THIS DEALING WITH LIGHT TECH HAS LEFT A BAD TASTE IN MY MOUTH.

AND I TELL YOU WHAT, UH, I'M GOING TO BE LETTING EVERY CITY IN TOWN IN THIS STATE THAT I TALK TO KNOW THAT THIS IS THE WAY THEY NEGOTIATE OR THIS IS THE WAY THEY MOVE FORWARD WITH THINGS.

NOT YOU, BUT THIS IS WRONG.

18 MONTHS AND THEN THEY SAT ON THERE FOR HOW MANY MONTHS, BUT THEY COULD HAVE COME AND SAID, LISTEN, THIS IS THE WAY WE DO BUSINESS.

THIS IS WHAT IT'S GOING TO BE.

AT LEAST WE WOULD KNOW AHEAD OF TIME.

I THINK PART OF THE PROBLEM IS IT'S A SMALL PRO, A SMALL PROJECT IS WHAT WE WERE TOLD.

NEVER HEARD THAT BEFORE.

REALLY TO, TO THIS EXTENT IT WAS MENTIONED HERE AND THERE, BUT CERTAINLY, UH, NOT TO KILL A DEAL OR CHANGE THE TERMS, PULL THE RUG OUT FROM UNDERNEATH US.

BUT LIKE I SAID, AND I AGREE WITH WHAT EVERYBODY HERE SAID, BUT WE NEED A PROJECT.

I DON'T THINK WE'RE URGENT FOR A PROJECT, BUT I DON'T KNOW WHERE THE FEDERAL GOVERNMENT'S GOING TO GO MOVING FORWARD.

I I WILL SUPPORT THIS AND I DON'T KNOW IF IT'LL FAIL OR NOT, BUT I WILL SUPPORT IT BECAUSE WE DO NEED A PROJECT.

AND QUITE HONESTLY, THE WAY THE FEDERAL GOVERNMENT'S GOING WITH THEIR MONEY, THERE MAY NOT BE ANOTHER PROJECT LIKE THIS FOR MANY YEARS TO COME.

SO I WOULD RATHER MOVE FORWARD WITH WHAT I'M, I'M TOLD THIS IS THE WAY THE PROJECT IS, THIS IS THE WAY IT WAS.

THEY JUST DIDN'T COMMUNICATE IT VERY WELL.

BUT I, I'M GOING TO SUPPORT THIS AND I'M PROBABLY GONNA KICK MYSELF IN ONE WAY OR THE OTHER.

BUT YOU KNOW, I, YOU TALKED ABOUT THE PEOPLE'S GONNA HELP THE 30 PEOPLE'S GONNA HELP.

I'VE BEEN HEARING ABOUT IT FOR YEARS.

WE NEED SOMETHING.

SO I I HOPE WE REALLY CAN MAKE THOSE 30 PEOPLE LIVE IN A PLACE WITH A ROOF OVER THEIR HEAD.

GO AHEAD.

[00:45:03]

UM, BUT THE ONE THING THAT HAS STAYED, WE, WE DON'T, WE'RE NOT COMING BACK ASKING FOR MORE MONEY.

THE UPFRONT PAYMENT IS STILL THE SAME.

WELL THAT WOULD REALLY KILL IT.

YEAH, WE'RE NOT, YEAH, ABSOLUTELY NOT.

NO.

WE HAVE EVERYTHING READY TO GO AND THE ONE THING THAT I CAN GUARANTEE IS THAT, YOU KNOW, I'M PART OF THIS PROJECT.

YOU HAVE MY CELL PHONE NUMBER.

IF YOU EVER NEED ME TO STAND IN FRONT OF COUNCIL EVERY MEETING AND GIVE A UPDATE, I'D BE HAPPY TO, I'D DO ANYTHING.

I DON'T THINK THAT THAT'S THE PART OF THE ISSUE THAT WE HAVE.

IT'S THE LENDING END AND THE LONG TERM END.

75 TO 99 YEARS IS, IS IT'S THAT IT, SO, UM, ALRIGHT, DO WE HAVE A MOTION? BRIAN, YOU SAID YOU WOULD DO THE MOTION OR MELISSA? YEAH, I'LL MAKE A MOTION.

I MOVE TO APPROVE RESOLUTION 2025 DASH 0 5 0 5 APPROVING THE GROUND LEASE AGREEMENT, LAND USE RESTRICTION AGREEMENT, DEED OF TRUST AND PROMISSORY NOTE WITH A VILLAS ON SHELBY LLC FOR THE DEVELOPMENT OF A 30 UNIT LITECH AFFORDABLE HOUSING PROJECT AT 2250 SHELBY DRIVE.

DO WE HAVE A SECOND? SECOND MAY I MAKE A FRIENDLY AMENDMENT? OKAY.

SUBJECT TO THE CITY ATTORNEY'S APPROVAL OF THE LEASE, IS THE LEASE READY TO BE SIGNED? IT, IT IS.

THERE'S THE RED LINE THAT SHOWS IN THE PACKET, BUT, UM, I DON'T THINK THERE'D BE ANY OTHER, BUT THAT IS OUR STANDARD LANGUAGE IN CASE SOMETHING COMES UP.

THAT'S FAIR.

IT ALLOWS ME TO CHANGE ANYTHING MINOR, NOT ANY OF THE MAJOR TERMS. SO I WOULD ACCEPT THAT FRIENDLY AMENDMENT.

OKAY.

DID WE HAVE A SECOND? I'M SORRY.

WE, MELISSA HAS THE SECOND OKAY.

COMMENT.

ANY COMMENTS BEFORE WE DO THE VOTE? YEP.

THANK YOU MAYOR.

GO AHEAD PETE.

YOU KNOW, I'M, I I WILL REITERATE THAT I AM A TRUST BUT VERIFY KIND OF GUY AND I APPRECIATE THAT SOME OF MY COUNCIL MEMBERS MIGHT BE WILLING TO TRUST THE WORDS THAT WE'VE HEARD, BUT I DON'T KNOW THAT WE'VE VERIFIED IT ALL AND I KIND OF FIND IT SURPRISING THAT WE WOULD MAKE, UH, SUCH A BIG DECISION WITHOUT EVER HAVING EXPERIENCE IN DOING THAT AND GETTING SOME ADVICE.

I MEAN, NOT THAT THIS IS THE BIG DEAL, BUT WE EVEN HAVE TROUBLE IN THIS AGREEMENT WITH DEFINING LENDER OR LANDLORD WHEN WE'RE TALKING ABOUT RENEGOTIATING, YOU KNOW, THE, UH, THE BUYOUT CLAUSE.

AND ALTHOUGH OUR ATTORNEY I UNDERSTAND HAS ASKED THAT WE DEFINE THE TERM AND GET US, UH, A POSITION COVERED, WE DON'T SEE MOTION, UH, UH, PROGRESS IN THAT DIRECTION AND I DON'T KNOW WHY.