Fountain Hills council affirms permit extension for Park Place, directs attorney to negotiate revised development agreement

Fountain Hills — The Town Council voted unanimously to affirm a prior decision allowing renewal of Park Place building permits under the town's 2018 code and then directed the town attorney to provide a draft redline development agreement to the project's parties and negotiate a revised agreement for future council consideration.

The move on the project for the downtown Park Place development came after lengthy public comment and a staff timeline review showing the original development agreement (DA) was approved in June 2016 and that later extensions, permit submittals and approvals occurred through 2023. Town Manager John Wesley summarized the history for the council, saying, "From the beginning, 06/16/2016, the council approved [the] development agreement and land use plan for the development of the Park Place project." The council's actions were split into two formal votes: (1) a vote to affirm the council's Sept. 2 decision to allow permit renewals under the 2018 code (approved 6-0), and (2) a post-executive-session vote directing the town attorney to distribute the draft redline DA and negotiate a revised agreement with the owner/developer (approved 6-0).

Why it mattered: Developers and their partners argued that a 2023 estoppel certificate — a lender-facing, point-in-time document — confirmed the project was in compliance and that reinstating or relying on that certificate should allow construction of phases 2 and 3 to proceed. Developer Bart Shea read portions of that estoppel in the meeting, telling the council, "The development agreement is in full force and effect and has not been assigned, amended, or modified in any manner except as stated." Town Attorney Jen (listed in the record as the town attorney) explained the legal point: an estoppel is "a point in time" document and does not itself extend or alter the DA or permit deadlines.

Key facts and council concerns

- Timeline and permits: Staff said permits for phases 2 and 3 were approved in 2023 but were not issued because fees were not paid; approved permits remain subject to payment and typically must be issued within 180 days of approval or be renewed. Staff described a sequence of resubmittals and reviews that culminated in building-permit approvals in 2023 but noted those permits then expired when the DA and permit timelines were not satisfied.

- Building-code change and cost consideration: Council discussion centered on the town's adoption of the 2024 building code and the developer's request to preserve entitlement under the earlier 2018 code. Staff said the council's Sept. 2 vote to allow renewal under the 2018 code had been conditioned on renegotiating the DA; staff and developers referenced an estimated cost savings to the developer of roughly $1,500,000 if the permits could be renewed without redesigning to the 2024 code.

- Ownership and operating agreements: Staff reported recorded changes in title after the original 2016 DA, including assignments involving an LLC identified in staff materials as Phase 2 & 3 Owners LLC and references in the record to other investor groups. Developers stated they control the operating agreements and signatory rights; one developer said the ownership and operating agreement pages had been provided to the town attorney.

- Public comment and developer stance: Multiple speakers, including developer representatives (Bart Shea and Cecil Yates) and longtime downtown stakeholders, urged the council to allow permit issuance and to avoid renegotiating substantive terms they said were already satisfied. Larry Myers and other residents urged transparency and stronger public notice about past negotiations and changes to the DA.

Council action and next steps

- Vote 1 (affirm Sept. 2 action): Councilwoman McMahon moved to affirm the Sept. 2 decision that allowed permit renewals under the 2018 code subject to renegotiation of the DA; the motion passed 6-0 on a roll call (Councilmembers Larrabee, McMahon, Watts, Earl, Calabianakis and Mayor Bridal voted yes). The council directed staff to move to agenda item B.

- Executive session and Vote 2 (authorize attorney to negotiate): The council met in executive session to discuss legal issues, then reconvened. A subsequent motion directed the town attorney to send the draft redline development agreement to the relevant parties and to negotiate a revised development agreement with those parties for later council consideration; the motion passed on roll call 6-0. Mayor Bridal explained the vote as a measure to give interested parties a look at the DA redlines and to "get the ball moving."

What was not decided: The council did not sign a final, binding revised development agreement at this meeting. Staff and the town attorney described the redline as a starting point intended to align the DA with current conditions (including an updated development schedule) and to remove provisions that staff considers outdated or unenforceable. The town attorney said adjustments on parties' names and contact information can be made to match current title documents.

Context and legal points

- Estoppel certificates: Town counsel advised the council that an estoppel certificate is evidence for lenders at a given date and does not itself substitute for a current, enforceable DA or for paid, issued permits.

- Permit issuance: Staff repeatedly noted that approval of a site plan differs from issuance of permits; approved permits require payment of fees to be issued and are subject to time limits and applicable building codes.

Ending: The council's direction gives the town attorney authorization to seek negotiated language with the developers and owners; any final DA revisions or approvals will return to the full council for public vote. Until the parties reach a negotiated, signed agreement and any required permit fees are paid, the town stated that permit issuance remains contingent on satisfying those administrative and legal requirements.