By Melissa Rosequist
Twitter: @mrosequist_

Paradise Valley officials are moving forward with roadway infrastructure around the Five Star Development project at Lincoln Drive and Mockingbird Lane.

After a previous contract for roadway improvements failed to come to fruition, the Paradise Valley Town Council has now agreed to a second, more expensive contract, which includes road work to conclude in February 2021.

On Oct. 24, the Town Council unanimously approved the execution of a Construction Manager at-Risk contract, and a construction management services contract --- both applying to Lincoln Drive, Mockingbird Lane and Indian Bend Road improvements.

Five Star Development --- the entity building the Ritz-Carlton Paradise Valley campus --- and the municipality agreed to a development agreement in 2016, which, among other things, stipulates Five Star is responsible for reimbursing the town for the bulk of the amount of the CMAR contract. The development agreement also requires the work to be done in an 18 months.

The CMAR contract allows work to move forward in an expedited manner on road and infrastructure improvements for the three roadways surrounding the $13.2 million project.

In early 2016, the Paradise Valley Town Council approved, by a 4-3 vote, a proposal by Five Star Development to build a new project on approximately 100 acres on the northeast corner of Lincoln Drive and Mockingbird Lane.

The project included plans for a Ritz-Carlton resort and a variety of different housing products. Since the project’s passage, staff from the town have been working diligently to fulfill all of the town’s obligations under the agreement in a timely, responsible, and economic manner, town officials say.

A second CMAR contract

On Oct. 24, the Town Council discussed the two contracts during a study session meeting prior to casting their votes later in the evening.

Town Manager Jill Keimach outlined the details of the 2016 development agreement, which stipulates the town agreed to manage the design and construction of the “perimeter roads,” while the two entities share the financial costs associated.

Five Star Development is financially responsible for construction of the roadway improvements on Indian Bend Road, Mockingbird Lane and the north half of Lincoln Drive. Five Star is also responsible for a new traffic signal at Lincoln Drive and Quail Run Road.

The town is financially responsible for construction of the south side of Lincoln Drive, and Mockingbird Lane north of Indian Bend Road.

In February 2019, the town went out for a CMAR contract, and selected Achen-Gardener, who then bid out and got estimates for the construction of the work, Ms. Keimach explained.

The guaranteed maximum price at that time was $11.4 million total, of which $9.4 million was Five Star Development’s share.

“It is not a qualitative number, it is done based on the development agreement that both parties have signed,” Ms. Keimach said.

In June, the council approved the $11.4 million, three-party CMAR, with street construction anticipated to be completed by August 2020 --- the date Five Star had given the municipality as an estimated opening of the hotel, Ms. Keimach said.

“In order for the guaranteed maximum price to be held, those estimates are only good for a certain amount of time as costs increase. So, Achen-Gardener said they could keep that guaranteed maximum price until July 1,” Ms. Keimach said.

“For various reasons, Five Star chose not to sign the contract, the CMAR. So, in October, tonight, Oct. 24, we are returning to council with a two-party, restructured CMAR.”

Ms. Keimach says because of the delay between June 13 and Oct. 24, the date for road construction to be completed is now February 2021.

“We have had to also refresh our bids, so as part of all of this, as expected with every construction project we’ve heard about in the Valley --- the price and the estimates are going up,” she said. “So it has increased to $13.2 million total.”

However, she says a lot of that increase is due to a Phoenix Water main relocation.

Ms. Keimach says the town is a partner with Five Star Development, and want to do the best they can.

“The main entrance on Lincoln Drive is our highest priority because that’s their entrance they have expressed a desire,” Ms. Keimach said.

Town Attorney Andrew Miller explained to the council that initially, when working with an earlier contract the timing and how it would effect bank draws gave Five Star pause, but those issues were eventually resolved.

“We had the assumption we would all three sign the same [contract], and that would allow Achen-Gardener to bill directly Five Star for its portion and bill the town for its portion,” Mr. Miller said.

“Five Star basically came back and said that’s not what the development agreement says, it says the town will construct and then bill us. They said we’d rather do it that way, than sign on the bottom line.”

Based on those conversations, Mr. Miller says, the town went back to restructure the contract.

The second item council approved for this project was a construction management contract with Wood Patel & Associates for $454,000.

The contract allows for a full-time inspector on-site for the duration of the project, with a resident engineer and other roles available, Town Engineer Paul Mood said.

Ultimately, the contract enhances the abilities the town staff has, Ms. Keimach said.

“We are not staffed to do a project of this size,” Mr. Mood noted.

The project scope includes the three perimeter roadway reconstructions; as well as a roundabout on Mockingbird Lane at Indian Bend Road, a sewer on Lincoln Drive, storm drains, utility relocations and meandering sidewalks where possible.

Ultimately, the town has a 13-month schedule, with utility work happening through December 2019, followed by construction beginning January 2020 and ending February 2021.

Commitment

At the dais during the business meeting, Councilman Paul Dembow voiced his position on voting for the CMAR contract.

“I just wanted to point out for the record, the town stands behind all the obligations that it has, and agreements that it signs. I was not a member that supported this agreement,” Mr. Dembow said of the 2016 development agreement.

“This is a prime example of why I didn’t support the original agreement. It’s unheard of to have a developer come into your town, and the town is responsible for putting in infrastructure for the developer; and then the town has to pay for it and bill back, and become the creditor. I just think it’s not how business is done anywhere else, and I feel quite bad that we’re doing it this way.

“But we have an obligation to do it and I wish the Five Star Development project absolute success. It makes my stomach a little bit sick to vote for this, but we have to do so.”

Mayor Jerry Bien-Willner also acknowledged the town’s commitment to its obligations.

“We’re hopeful for a good outcome,” he said. “We’ll be keeping a close eye on this project as we have, and hoping for its success with a lot of effort from our staff toward that end as well.”

In a press release issued by Ms. Keimach the day after the vote, she outlined the CMAR contract is one of several steps the town has taken as part of its commitments outlined in the development agreement between the town and Five Star passed by the Town Council in 2016.

Other measures include:

• Working with Five Star and the City of Scottsdale on the routing and improvements for Indian Bend Drive and its access point to the Five Star project. Designs have been created for the road that would allow for easy access to the Five Star property with minimal disruption for through traffic. The Town is awaiting approval from Five Star to allow further design work to continue on the road improvement.
• The town has also requested an easement from Five Star, which was intended as part of Five Star’s obligation under the development agreement, to allow for the creation of a roundabout on Mockingbird Drive. The Town is awaiting approval from Five Star to continue with this improvement as well.
• The town is doing everything in its power to meet or exceed the time schedule and be thorough in its review of plans and inspections. To help expedite the construction process, the Town has contracted with outside inspectors that have the appropriate skill set and manpower to safely and efficiently inspect roadway improvements throughout construction.