AFTER RECORDING, RETURN TO:
City Clerk
City of Surprise, Arizona
16000 N. Civic Center Plaza
Surprise, Arizona 85374
With a copy to:
Greenberg Traurig LLP
2375 E. Camelback Road
Phoenix, Arizona 85016
Attn: Rebecca L. Burnham

DEVELOPMENT AGREEMENT

by and between

CITY OF SURPRISE, ARIZONA,
an Arizona municipal corporation

and
SFI GRAND VISTA, LLC,
A Delaware limited liability company

Dated: September __, 2016

PHX 331793171v1

 TABLE OF CONTENTS
1.

Page
Definitions............................................................................................................... 2

2.

Permitted Use and Improvements ........................................................................... 4

3.

Development Regulation ........................................................................................ 4

4.

Infrastructure ........................................................................................................... 5

5.

Municipal Services.................................................................................................. 6

6.

Anti-Moratorium ..................................................................................................... 6

7.

General Terms. ........................................................................................................ 6

PHX 331793171v1

 DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (the “Agreement”) is made by and between the
City of Surprise, an Arizona municipal corporation (the “City”), and SFI GRAND VISTA LLC,
a Delaware limited liability company (“Owner”). City and Owner may be referred to
individually as a “Party” and collectively, as the “Parties”.
RECITALS:
A.
Owner owns certain real property consisting of approximately 5,500 acres located
in the City of Surprise (the “City”), at 33040 N. 203rd Avenue, Surprise, Maricopa County, State
of Arizona, as legally described on Exhibit “A” attached hereto, upon which are located certain
improvements (the “Property”).
B.
The Property is the subject of that certain Grand Vista Pre-Annexation
Development Agreement, by and between the City and Surprise Grand Vista JV I, LLC, a
Delaware limited liability company, Owner’s predecessor-in-interest, recorded in the Official
Records of Maricopa County (“Official Records”) on May 22, 2008 as Instrument No. 2008452752, as amended by that certain First Amendment to the Grand Vista Pre-Annexation
Development Agreement, recorded in the Official Records on June 8, 2009 as Instrument No.
2009-0517080 (“Grand Vista PADA”).
C.
As contemplated by the Grand Vista PADA and in accordance with the
annexation procedures established in the provisions of A.R.S. § 9-471 et seq., the City Council
(the “Council”) adopted City of Surprise Ordinance No. 08-75, on May 8, 2008, annexing the
Property into the City (the “Annexation”) and, on May 8, 2008, adopted City of Surprise
Ordinance No. 08-24, approving the Grand Vista Planned Area Development (as such term is
defined in the Grand Vista PADA) (“PAD Zoning”). The City of Surprise zoning ordinance in
effect at the time of annexation was Ordinance 07-44, Chapter 25.
D.
Prior to the Annexation and PAD Zoning, the Property was used, occupied and
improved for experimental and proving ground purposes pursuant to a special use permit issued
by Maricopa County, Arizona, in accordance with Section 1301.1.5 of the Maricopa County
Zoning Ordinance (as further delineated in Section 2, the “Permitted Use and Improvements”).
E.
Following the Annexation and PAD Zoning, the City acknowledges and agrees
the use, occupancy and improvement of the Property for the Permitted Use and Improvements in
the City has continued, with no intent to abandon such use, and the same constitutes a vested
continuing legal non-conforming use in the City.
F.
Owner has or intends to enter into a Lease With Option to Purchase (the “Lease”)
with Route 14 Investment Partners LLC, a Delaware limited liability company (the “Tenant”),
pursuant to which the Tenant is authorized to use, occupy and further improve the Property for
the Permitted Use and Improvements and has an option to purchase the Property. The Parties
acknowledge that a condition to the obligations of the Tenant under the Lease is the City’s
acknowledgement and agreement that the Permitted Use and Improvements, as provided in this
Agreement, constitutes a vested, continuing, legal non-conforming use in the City.

PHX 331793171v1

 G.
The City further acknowledges that the use, occupancy and improvement of the
Property for the Permitted Use and Improvements are of such magnitude that the Tenant requires
the Parties’ adoption and execution of this Agreement before the Tenant will expend substantial
efforts and costs in connection with the Permitted Use and Improvements and that such adoption
and execution is material consideration without which the Tenant would not be willing to
proceed with the Lease.
H.
The City has determined that the use, occupancy and improvement of the Property
through the Permitted Use and Improvements will result in substantial economic and other
benefits to the City, including, through the Permitted Use and Improvements, the payment of
construction and other sales and privilege taxes as well as increasing tax and other revenues to
the City, enhancing the potential opportunities for job growth in the City and region, facilitating
realization of the City’s economic development objectives and otherwise operating to the benefit
of the City, Owner, the Tenant and the general public.
I.
The Parties are entering into this Agreement pursuant to the provisions of A.R.S.
§ 9-500.05 to recognize and facilitate the continued use, occupancy and development of the
Property for the Permitted Use and Improvements including the construction and development of
improvements on the Property consistent therewith and other matters relating thereto. The City
has determined that this Agreement is consistent with the General Plan.
J.
It is the intent of the Parties that, upon expiration of the Term (as hereinafter
defined) or earlier termination of this Agreement pursuant to Section 7.2 hereof, the PADA and
the PAD Zoning shall take effect under the normal operation of law.
K.
The Tenant, as the holder of the Tenant’s interest under the Lease, has executed a
consent to this Agreement and is an express third-party beneficiary of the terms and conditions
of this Agreement applicable to the Permitted Use and Improvements and the Tenant’s use,
occupancy and improvement of the Property pursuant thereto, provided, if the Tenant acquires
title to the Property, the Tenant shall succeed to the rights and obligations of Owner hereunder.
AGREEMENT:
IN CONSIDERATION of the foregoing recitals, which are incorporated herein by this
reference, and the representations and mutual covenants and conditions in this Agreement, the
Parties agree as follows:
1.
Definitions. In this Agreement, unless a different meaning clearly appears from the
context:
1.1.
“Affiliate” is any entity and any entity directly or indirectly controlling, controlled
by, or under common control with, the entity; for the purposes of this definition, (i) “control”
(including with correlative meaning, the terms “controlling,” “controlled by” and “under
common control”), as applied to any entity, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of the entity, whether
through the ownership of voting securities, by contract or otherwise, and (ii) “entity” means and
includes corporations, limited partnerships, general partnerships, joint stock companies, joint

PHX 331793171v1

 ventures associations, limited liability companies, limited liability partnerships, trusts, land
trusts, business trusts, and other organizations, whether or not legal entities.
1.2.
“Agreement” means this Agreement, as amended or restated or supplemented in
writing from time to time, and includes all exhibits hereto. References to Sections or Exhibits
are to this Agreement unless otherwise qualified.
1.3.

“Annexation” means as described in Recital C.

1.4.
Applicable Laws” means the federal, state, county, city and local laws (statutory
and common law) and rules and regulations as now or hereafter enacted or amended.
1.5.
amended.

“A.R.S.” means the Arizona Revised Statutes as now or hereafter enacted or

1.6.
“City” means the City of Surprise, an Arizona municipal corporation (and any
successor public body hereafter designated by or pursuant to Applicable Laws).
1.7.
“City Manager” means the person employed by the City to be the chief
administrative officer of the City or his designee, pursuant to Sec. 2-122 of the Code.
1.8.
1.9.
Agreement.

“City Regulations” means as described in Section 2.
“Code” means the City of Surprise Municipal Code in effect as of the date of this

1.10. “Community Development Director” means the person designated to administer
Part II, Land Development Ordinances, of the City Code and as the City’s zoning administrator.
1.11.

“Council” means the elected officials that comprise the governing body for the

1.12.

“Effective Date” means as described in Section 7.2.

1.13.

“Engineering and Design Standards” means as described in Section 4.2.

1.14.

“General Plan” means the Surprise General Plan 2035.

1.15.

“Grand Vista PADA” means as described in Recital B.

1.16.

“Lease” means as described in Recital F.

1.17.

“Official Records” means as described in Recital B.

City.

1.18.
company.
1.19.

PHX 331793171v1

“Owner” means SFI Grand Vista JV I, LLC, a Delaware limited liability
“PAD” means the zoning classification Planned Area Development.

 1.20.

“PAD Zoning” means as described in Recital C.

1.21.

“Party/Parties” means the City and/or Owner.

1.22.

“Permit by Inspection” means as defined in Section 3.2.

1.23. “Permitted Use and Improvements” means as described in Recital D, as further
delineated in Section 2.
1.24.

“Property” means as described in Recital A.

1.25. “Regulations” means the Code and City ordinances and regulations in effect from
time to time as described in Section 3.
1.26.

“Self-Certification” means as defined in Section 3.2.

1.27.

“Tenant” means as described in Recital F.

1.28

“Term” means as described in Section 7.2.

2.
Permitted Use and Improvements. The City acknowledges and agrees the use, occupancy
and improvement of the Property for the Permitted Use and Improvements is a vested,
continuing, legal non-conforming use in the City, which: (a) has not been abandoned and shall
remain in full force and effect for the Term of this Agreement, or if applicable, until the earlier
termination of this Agreement pursuant to Section 7.2; (b) is compatible with land use
regulations in effect at the time of annexation into the City of Surprise including the ordinance
described in Recital C; (c) runs with the land for the benefit of Owner, the Tenant and all persons
or entities holding a fee interest in the Property; and (d) is not subject to the Grand Vista PADA,
the PAD Zoning or, except as provided in this Agreement, any other zoning district or
classification now or hereinafter in effect in the City. Because the continuing legal nonconforming use has been limited while Owner marketed the Property, and to avoid confusion in
the future as to the uses that are currently allowable on the Property, the City acknowledges and
agrees the Permitted Use and Improvements includes all prior and current experimental and
proving ground uses and improvements, together with the natural expansion of such uses and
improvements as may be necessary to accommodate the business operations of the Tenant
thereon in furtherance of such continuing, legal non-conforming use (albeit limited while
marketing the Property) including, without limitation, improvements reflecting advances over
time in the applicable technologies and which may include solar power and other renewable
energy facilities.
3.
Development Regulation. Except as expressly set forth in this Agreement, the Tenant’s
use, occupancy and improvement of the Property in furtherance of the Permitted Use and
Improvements shall be subject to the Regulations and proceed as set forth in this Section 3. The
City will cooperate with Owner and the Tenant to promptly process the approval or issuance of
any permits, site plans or other development approvals requested in connection with the use,
occupancy and improvement of the Property for the Permitted Use and Improvements. The City
has designated the Community Development Director as the single point of contact for the
processing of all development approvals, who shall facilitate the processing of such requests.
PHX 331793171v1

 The Parties agree that the City’s review of the Tenant’s planned improvements of or on the
Property shall be conducted as set forth in this Agreement:
3.1.
Site Plans. To continue the Permitted Use and Improvements, site plan approval
is required for: a) material modifications or material expansion of existing buildings or
infrastructure; and b) for any new buildings or infrastructure. However, site plan approval is not
required site plan approval for tenant improvements to existing buildings including structural
repairs and building systems replacement. The Community Development Director shall have the
authority and may approve site plans for the Permitted Use and Improvements administratively;
provided, if the site plan is denied by the Community Development Director, the decision of the
Community Development Director may be appealed to the City Manager, who shall provide a
decision within ten (10) business days of receipt of any such appeal, as permitted by Ord. 07-44,
Chapter 125, Section 125-33 (4).
3.2
Building Safety. The Permitted Use and Improvements shall be in accordance
with all applicable building codes in effect at the City at the time of development, provided such
building codes are of general application. The City acknowledges and agrees that the Tenant
must be able to proceed rapidly with the Permitted Use and Improvements on the Property and,
accordingly, the City, with the cooperation of Owner, will conduct two pilot programs to
expedite the review and processing of permits to meet the Tenant’s development and
construction schedule: one called “Permit by Inspection” and the other called “SelfCertification.” All tenant improvements to existing buildings on the Property will be subject to
Permit by Inspection (for minor commercial interior remodels and tenant improvements which
allows customers to obtain plan review and permit approval at the job site. Inspection staff will
review plans on site and determine when to begin construction and require no increase in square
footage]).). Any new buildings or additions to buildings will be subject to plan review and
inspections by City staff; provided, the Tenant may utilize an architect of record listed on the
City of Phoenix’s Self Certification List and, in such event, process such permits through SelfCertification, whereby the City will not require auditing of the plans and, rather, will inspect
such buildings based on the plans. If the Tenant chooses not to utilize the Self Certification
process, new buildings will be subject to plan review and inspections in accordance with the
City’s standard plan process and review times.
3.3
Engineering and Design Standards. The Permitted Use and Improvements shall
be in conformance with the City’s engineering and design standards, as the same are in effect at
the time of development and of general application, for any civil permits on an Inspection by
Permit basis and will require civil plans to be submitted to the City for approval by the City
Engineer or Designee.
4.
Infrastructure. Owner or the Tenant, as applicable, shall be responsible for the design,
construction and installation of all infrastructure required for the Permitted Use and
Improvements including, without limitation, any utility connections to public infrastructure
located on or off the Property; provided, nothing in this Section 4 requires or otherwise obligates
Owner or the Tenant to design, construct, or install any public infrastructure..

PHX 331793171v1

 5.
Municipal Services. The City shall provide emergency fire and police protection to the
Property in a manner and at a level of service comparable to that provided to other similar
properties within the City.
6.
Anti-Moratorium. The Parties hereby acknowledge and agree, for the term of this
Agreement, no moratorium shall be imposed except as permitted by A.R.S. § 9-463.06.
7.

General Terms.

7.1.
Amendments. No change or addition is to be made to this Agreement except by a
written amendment executed by the City and Owner (with the written consent of the Tenant) or,
if the Tenant exercises its option to purchase the Property, by the City and the Tenant. The City
shall record in the Official Records of Maricopa County this Agreement and any amendment to
this Agreement within ten (10) days after it is executed by the City and Owner, and consented to
by the Tenant, or (if applicable) by the City and the Tenant.
7.2.
Term. This Agreement shall take effect upon execution of the Lease by Owner
and the Tenant, which Owner shall provide to City notice of pursuant to Section 7.4 (the date of
the Lease being the “Effective Date” of this Agreement). This Agreement shall remain in effect
until the date which is twenty-five (25) years from the Effective Date (the “Term”); provided,
however, this Agreement shall terminate without further action by the City, Owner or the Tenant
in the event the Lease terminates and the Tenant has not acquired title to the Property. If the
Tenant acquires title to the Property, the City may terminate this Agreement if use of the
Property for the Permitted Use and Improvements is abandoned for a period of 90 days or more;
provided, abandonment may not be inferred or deemed to have occurred: (a) during any period in
which Tenant continues to use, occupy or develop any portion of the Property for the Permitted
Use and Improvements which, for this purpose, shall include any presence by the Tenant or its
employees, representatives or contractors on any portion of the Property, or (b) during any period
in which use of the Property for the Permitted Use and Improvements is interrupted due to any
event or occurrence which could not be anticipated by or which is beyond the control of the
Tenant (which shall include, without limitation, acts of God, acts of the Federal or state
government (including legislative enactments), acts of a third party, any litigation or other action
concerning the validity and enforceability of this Agreement or relating to the subject matter
hereof, fires, floods, epidemics, quarantine, restrictions, strikes, embargoes, labor disputes, labor
or material shortages and unusually severe weather or the delays of contractors or materialmen
due to such causes, act of a public enemy, war, terrorism or act of terror (including but not
limited to bio-terrorism or eco-terrorism), nuclear radiation, declaration of national emergency or
national alert, blockade, insurrection, riot, labor strike or interruption, extortion, sabotage, or
similar occurrence or any exercise of the power of eminent domain by any governmental body
on behalf of any public, quasi-public, or private entity, or declaration of moratorium or similar
hiatus directly affecting the Property by any governmental entity or governmental action; or (c)
during any period in which use of the Property for the Permitted Use and Improvements is
interrupted due to the order, judgment, action, or determination of any court, administrative
agency, governmental authority or other governmental body, including any period required for
contesting in good faith any such order, judgment, action or determination; or (d) during any
period in which use of the Property for the Permitted Use and Improvements is interrupted due to
delay on the part of a governmental body in processing or unreasonable denial of any
PHX 331793171v1

 application, permit, license, request for approval, plan or submittal, or the imposition of any
unreasonable requirement on the part of a governmental body in connection with any approval
process). Subject to the preceding sentence, if the City determines the use of the Property for the
Permitted Use and Improvements has been abandoned for the required period of time and desires
to terminate this Agreement, the City shall provide written notice to the Tenant, whereupon,
within sixty (60) days of the Tenant’s receipt of such notice, the Tenant may notify the City of its
election to contest such determination and invoke the provisions of Section 7.6, in which event
the Parties shall proceed as provided in Section 7.6; provided, if the Tenant fails to timely
provide notice of its election to contest such determination and invoke the provisions of Section
7.6, the City shall provide a second written notice to the Tenant, whereupon, if the Tenant fails to
notify the City of its election to contest such determination and invoke the provisions of Section
7.6 within thirty (15) days of receipt of such second written notice, Tenant shall be deemed to
have elected not to contest the City’s determination and this Agreement shall terminate. Without
limitation of the foregoing, during the Term, the City shall not initiate any change or
modifications to the Permitted Use and Improvements except at the request of Owner, with the
consent of the Tenant, or, if the Tenant acquires title to the Property, at the request of the Tenant.
7.3.
Recordation. This Agreement shall be recorded in the Official Records not later
than ten (10) days after its full execution.
7.4.
Notices and Requests. Any, notice or other communication required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have been duly
given and received: (a) upon delivery to a Party or the Tenant, as applicable, and all persons
designated to receive copies of such notice or other communications to such Party, or the Tenant,
as applicable, at the addresses set forth below, (b) two (2) business days following deposit in the
U.S. Mail, registered or certified, return receipt requested, with sufficient postage and addressed
to a Party or the Tenant, as applicable, and all persons designated to receive copies of such notice
or other communication to such Party or the Tenant, as applicable, at the addresses set forth
below, and/or (c) one (1) business day following the pickup by, or delivery to, a recognized and
reputable overnight delivery service, with all required charges paid and instructing the delivery
service to delivery on the following business day, addressed to a Party or the Tenant, as
applicable, and all persons designated to receive copies of such notice or other communication to
such Party or the Tenant, as applicable, at the addresses set forth below, or, in each instance, to
such other address(es) designated by a Party or the Tenant, as applicable, to the other Party or the
Tenant, as applicable, in writing, prior to such notice or other communication, by notice duly
given pursuant to this Section 7.4.

PHX 331793171v1

City:

City of Surprise, Arizona
16000 N. Civic Center Plaza
Surprise, AZ 85374
Attn: City Manager

With a copy to:

City of Surprise, Arizona
16000 N. Civic Center Plaza
Surprise, AZ 85374
Attn: City Attorney

 Owner:

SFI Grand Vista LLC
c/o iStar Inc.
4350 Von Karman Ave., #225
Newport Beach, CA 92660
Attn.: Steven Magee and Eric Brooks

With a copy to:

Berry Riddell LLC
6750 E. Camelback Road, #100
Scottsdale, AZ 85251
Attn: Wendy Riddell

Tenant:

Route 14 Investment Partners LLC
__________________________
__________________________
Attn: _____________________

With a copy to:

Greenberg Traurig LLP
2375 E. Camelback Road
Phoenix, AZ 85016
Attn: Rebecca Burnham

7.5.
Default. Failure or unreasonable delay by either Party to perform or otherwise act
in accordance with any term or provision hereof shall constitute a breach of this Agreement.
Any breach not cured within thirty (30) days after written notice is received from the other Party
shall constitute a default under this Agreement; provided, however, if the failure is such that
more than thirty (30) days would reasonably be required to perform such action or comply with
any term or provision hereof, then the Party shall have such additional time as may be necessary
to perform or comply so long as the Party commences performance or compliance within said
thirty (30) day period and diligently proceeds to complete such performance or fulfill such
obligation; provided, however, that no such cure period shall exceed one hundred twenty (120)
days and, provided, further, the thirty (30) day period shall not apply where Applicable Law
requires the City to perform or otherwise act in a period in excess of thirty (30) days. Any notice
of a breach shall specify the nature of the alleged breach and the manner in which said breach
may be satisfactorily cured, if possible. In the event of default by either Party, the nondefaulting Party shall be entitled to specific performance and monetary damages; provided, such
remedies shall be cumulative and not exclusive of one another, and the exercise of one remedy
shall not constitute a waiver or election with respect to any other available remedy.
Notwithstanding anything herein to the contrary, in no event shall damages other than actual
damages be awarded or collected, it being the intention of the Parties to expressly waive special,
punitive, consequential or any damages other than actual damages.
7.6.
Dispute Resolution. In the event there is a dispute hereunder which the Parties
cannot resolve between themselves, the Parties agree that there shall be a forty-five (45) day
moratorium on litigation during which time the Parties agree to attempt to settle the dispute by
nonbonding mediation. The mediation shall be held under the commercial mediation rules of the
American Arbitration Association. The matter in dispute shall be submitted to a mediator
PHX 331793171v1

 mutually selected by the Parties. In the event that the Parties cannot agree upon the selection of
a mediator within seven (7) days, then within three (3) days thereafter, the City and Owner shall
request the presiding judge of the Superior Court in and for the County of Maricopa, Arizona, to
appoint an independent mediator. The mediator selected shall have at least five (5) years’
experience in mediating or arbitrating disputes relating to development. The cost of any such
mediation shall be divided equally between the City and Owner. The results of the mediation
shall be nonbonding on the Parties, and any Party shall be free to initiate litigation subsequent to
the moratorium.
7.7.
Choice of Law, Venue, and Attorneys’ Fees. Any dispute, controversy, claim, or
cause of action arising out of or related to this Agreement shall be governed by Arizona law.
The venue for any such dispute shall be Maricopa County, Arizona, and each Party waives the
right to object to venue in Maricopa County for any reason. A Party shall be entitled to recover
its attorneys’ fees and other costs from the other Party incurred in any such dispute, controversy,
claim or cause of action, but each Party shall bear its own attorneys’ fees and costs, whether the
same is resolved through arbitration, litigation in a court, or otherwise.
7.8.

Representations.
7.8.1. City Representations. The City represents to Owner that:

a)
The City is duly formed and validly existing as a municipal
corporation and its execution and approval of this Agreement has been in compliance with
Applicable Law including the procedural requirements of the Code.
b)
The City will execute and acknowledge when appropriate all
documents and instruments and take all actions necessary to implement and evidence this
Agreement.
c)
As of the date of this Agreement, the City knows of no litigation,
proceeding, initiative, referendum, or official investigation contesting the powers of the City or
its officials with respect to this Agreement including the City’s execution, delivery and
performance hereof, that has not been disclosed in writing to Owner and the Tenant.
d)
The execution, delivery and performance of this Agreement by the
City is not prohibited by, and does not conflict with, any other agreements, instruments or
judgments or decrees to which the City is a party or is otherwise subject.
e)
The City has been assisted by counsel of its own choosing in
connection with the preparation and execution of this Agreement.
7.8.2. Owner Representations. Owner represents to the City that:
a)
Owner is duly formed and validly existing under the laws of the
State of Delaware and qualified to do business in the State of Arizona, and its execution and
approval of this Agreement has been in compliance with its organizational/formation documents.

PHX 331793171v1

 b)
Owner will execute and acknowledge when appropriate all
documents and instruments and take all actions necessary to implement and evidence this
Agreement.
c)
As of the date of this Agreement, Owner knows of no litigation,
proceeding, initiative, referendum, or official investigation contesting the powers of Owner or its
officers with respect to this Agreement including Owner’s execution, delivery and performance
hereof, that has not been disclosed in writing to the City and the Tenant.
d)
The execution, delivery and performance of this Agreement by the
City is not prohibited by, and does not conflict with, any other agreements, instruments or
judgments or decrees to which the City is a party or is otherwise subject.
e)
Owner has been assisted by counsel of its own choosing in
connection with the preparation and execution of this Agreement.
7.9.
Assignment. The provisions of this Agreement are binding upon and shall inure
to the benefit of the Parties, and their successors in interest and assigns, provided any person or
entity that has acquired title to the Property shall be entitled to the benefits of this Agreement
only if the interest of such person or entity in the Property is expressly subject to Owner’s rights
and obligations hereunder pursuant to a written instrument recorded in the Official Records;
provided, further, the Parties acknowledge and agree that the Tenant, and Tenant’s Affiliates, are
express third-party beneficiaries of the terms of this Agreement applicable to the Permitted Use
and Improvements (as provided herein) and, if the Tenant acquires title to the Property, the
Tenant shall succeed to the rights of Owner hereunder without the necessity of executing or
recording any further instrument. Without limitation of the foregoing, the Tenant may assign its
interest under this Agreement to any Tenant Affiliate, who shall succeed to the rights of the
Tenant hereunder, but an assignment to any other person or entity shall be made only with the
written approval of the City.
7.10. No Agency Created. It is not intended by this Agreement to, and nothing
contained in this Agreement shall, create any partnership, joint venture or agency relationship
between the Parties. No term or provision of this agreement is intended to, or shall be, for the
benefit of any person or entity not a party hereto, and no such other person or entity shall have
any right or cause of action hereunder except the Tenant, who the Parties acknowledge and agree
is an express third-party beneficiary of the terms of this Agreement applicable to the Permitted
Use and Improvements (as provided herein) and, if the Tenant acquires title to the Property, shall
succeed to the rights of Owner hereunder. Without limitation of the foregoing, this Agreement
shall be superior and senior to any lien or encumbrance placed on the Property, or any portion
thereof, including the lien of any mortgage or deed of trust.
7.11. Waiver. No delay in exercising any right or remedy shall constitute a waiver
thereof; and no waiver of any breach shall be construed as a waiver of any preceding or
succeeding breach of the same or any other covenant or condition of this Agreement. No waiver
shall be effective unless it is in writing and is signed by the Party asserted to have granted such
waiver.

PHX 331793171v1

 7.12. Fair Interpretation. This Agreement shall be construed according to the fair
meaning of its language. The rule of construction that ambiguities shall be resolved against the
Party who drafted a provision shall not be employed in interpreting this Agreement.
7.13. Headings. The headings of this Agreement are for purposes of reference only and
shall not limit or define the meaning of any provision of this Agreement.
7.14. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which shall constitute one and the same instrument.
7.15. Computation of Time. In computing any period of time under this Agreement,
the date of the act or event from which the designated period of time begins to run shall not be
included. The last day of the period so completed shall be included unless it is a Saturday,
Sunday or legal holiday, in which event the period shall run until the end of the, next day which
is not a Saturday, Sunday or Legal holiday. The time for performance of any obligation or
taking any action under this Agreement shall be deemed to expire at 5:00 p.m. (Phoenix, Arizona
local time) on the last day of the applicable time period provided herein.
7.16.

Conflict of Interest. This Agreement is subject to the terms of A.RS. § 38-511.

7.17. Hierarchy of Documents. There are numerous documents that affect the Property
and the subject matter of this Agreement. In the event of a conflict or inconsistency between or
among any or all of these documents, for purposes of the subject matter of this Agreement, the
documents shall take priority in the following order: (1) this Agreement (acknowledging the
existence and scope of the vested legal non-conforming use on the Property); and (2) the
Regulations. Neither the Grand Vista PADA nor the PAD Zoning shall apply to the Permitted
Use and Improvements during the Term of this Agreement.
7.18. Entire Agreement. This Agreement, together with the Definitions, Recitals and
Exhibits attached hereto (incorporated herein by this reference) constitutes the entire agreement
between the Parties concerning the subject matter hereof. All prior and contemporaneous
agreements and understandings of the Parties with respect to the subject matter hereof, oral or
written, are superseded by and merged into this Agreement.
7.19. Time of the Essence. Time is of the essence of this Agreement and with respect
to the performance required by each Party.
7.20. Compliance with Federal Immigration Laws and Regulations. To the extent
applicable under A.R.S. §§ 41-4401 and 23-214, Owner represents and warrants that it is in
compliance with all federal immigration laws and regulations that relate to its employees and
compliance with the E-verify requirements of A.R.S. § 23-214(A).
Breach of the
abovementioned warranty shall be deemed a material breach of the Agreement. The City retains
the legal right to randomly inspect the papers and records of any employee who works under this
Agreement to ensure compliance with the above-mentioned laws.
7.21. No Personal Liability. No member, official or employee of the City nor any
member, shareholder, director, officer, partner, manager or employee of Owner shall be
personally liable to the other Party, or to any successor or assign of the other Party, in the event
PHX 331793171v1

 of any default or breach by such Party, or for any amount which may become due to the other
Party.
7.22. Assurances. Each Party agrees to perform such other and further acts and to
execute and deliver such additional agreements, documents, affidavits, certifications,
acknowledgments and instruments as any other Party may reasonably require to consummate,
evidence, confirm or carry out the matters contemplated by this Agreement.
7.23. Waiver of A.R.S. § 12-1134 (“Prop 207”) Claims. Pursuant to A.R.S. § 12-1134
et seq. Owner agrees and understands the City is entering into this Agreement in good faith with
the understanding that, if it acts consistently with the terms and conditions herein, it will not be
subject to a claim for diminished value of the Property from Owner or other parties having an
interest in the Property. Owner, on behalf of itself and all other parties having, an interest in the
Property, intends to encumber the Property with this Agreement and agrees and consents to all
the conditions imposed by this Agreement and, by signing this Agreement, waives any and all
claims, suits, damages, compensation and causes of action Owner may have now or in the future
under the provisions of A.R.S. §§ 12-1134 through and including 12-1136 (but specifically
excluding any provisions included therein relating to eminent domain) provided the City acts
consistently with the terms and conditions herein.
[SIGNATURES ON FOLLOWING PAGES]

PHX 331793171v1

 IN WITNESS WHEREOF, the Parties have executed this Development Agreement on
the date written above.
CITY:
CITY OF SURPRISE, an Arizona municipal
corporation

By: ______________________________
______________________, Mayor
Date: _____________________________

APPROVED AS TO FORM:

By: _______________________________
City Attorney

ATTESTED:
By: ________________________________
City Clerk

STATE OF ARIZONA

)
) ss.
COUNTY OF MARICOPA )
Subscribed and sworn to before me this ____ day of ________________, 2016 by
________________, the Mayor of CITY OF SURPRISE, an Arizona municipal corporation.

____________________________________
Notary Public
My commission expires:
_____________________

PHX 331793171v1

 OWNER:
SFI GRAND VISTA LLC, a Delaware limited
liability company
By: ________________________________
Managing Member

By: _________________________________
Date: _______________________________

STATE OF ARIZONA

)
) ss.
COUNTY OF MARICOPA )
Subscribed and sworn to before me this ____ day of ________________, 2016 by
_______________________, the ___________________ of _____________________., an
______________ limited liability company, the Managing Member of SFI Grand Vista LLC, a
Delaware limited liability company

____________________________________
Notary Public
My commission expires:
_____________________

PHX 331793171v1

 CONSENT AND ACKNOWLEDGEMENT

Reference is made to the Development Agreement, dated as of the Effective Date (as
defined therein), by and among the City of Surprise, an Arizona municipal corporation (the
“City”), and SFI Grand Vista LLC, a Delaware limited liability company (“Owner”), to which
this Consent and Acknowledgement is attached (the “Agreement”). All capitalized terms used
and not otherwise defined in this Consent and Acknowledgement shall have the meanings set
forth in the Agreement. The undersigned, as the prospective Tenant and holder of a Purchase
Option in respect of the Property pursuant to the Lease (as defined in the Agreement), which will
be the subject of a Memorandum of Lease to be recorded in the Official Records of Maricopa
County, Arizona, hereby consents to the terms of the Agreement, acknowledges that the
Agreement shall bind the Property and authorizes the recordation of the Agreement with respect
to the Property; provided, and notwithstanding that the undersigned is a third-party beneficiary of
the Agreement, in no event shall anything in this Consent and Acknowledgement constitute a
personal assumption by the undersigned of the obligations of any Party under the Agreement.

DATED: _______________, 2016
ROUTE 14 INVESTMENT PARTNERS LLC,
a Delaware limited liability company

By: _________________________________
Name: _______________________________

STATE OF ___________
COUNTY OF _________

)
) ss.
)

The foregoing instrument was acknowledged before me this ____ day of _______, 2016,
by______________________, the______________________ of________________________,
an _______________________________________.
___________________________________
Notary Public

PHX 331793171v1

 Exhibit A

Legal Description of Property

PHX 331793171V1

No. NCS-800815-PHX1

EXHIBIT "A"

PARCEL NO. 1:
SECTION 7, TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND
MERIDIAN, MARICOPA COUNTY, ARIZONA,
EXCEPT THAT PORTION OF SAID SECTION 7 DESCRIBED AS FOLLOWS;
COMMENCING AT THE SOUTHWEST CORNER OF SAID SECTION 7;
THENCE NORTH ALONG THE TOWNSHIP LINE BETWEEN RANGES 2 AND 3 WEST, A DISTANCE OF
1,140.85 FEET TO THE TRUE POINT OF BEGINNING;
THENCE NORTH 89º57' EAST, A DISTANCE OF 930 FEET;
THENCE NORTH 207.15 FEET;
THENCE SOUTH 89º56' WEST, A DISTANCE OF 930 FEET TO A POINT ON THE
TOWNSHIP LINE MARKED BY A 1" PIPE BETWEEN RANGES 2 AND 3 WEST;
THENCE SOUTH ALONG SAID TOWNSHIP LINE, A DISTANCE OF 207.15 FEET TO THE TRUE POINT OF
BEGINNING, AND
EXCEPT ALL OIL AND GAS AS RESERVED IN PATENT FROM UNITED STATES OF AMERICA.
PARCEL NO. 2:
THE SOUTH HALF OF SECTION 31, TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT
RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
EXCEPT THE WEST HALF OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SAID
SECTION 31, AND
EXCEPT THE FOLLOWING DESCRIBED PARCEL;
LOT 3, SECTION 31, TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND
MERIDIAN, MARICOPA COUNTY, ARIZONA, AND
EXCEPT ALL COAL AND OTHER MINERALS AS RESERVED IN PATENT.
PARCEL NO. 3:
SECTION 5, TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND
MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 4:
LOTS 1, 2, 3, 4, AND THE EAST HALF, AND THE NORTHWEST QUARTER OF THE NORTHEAST
QUARTER OF THE NORTHWEST QUARTER, AND THE SOUTH HALF OF THE NORTHEAST QUARTER

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 OF THE NORTHWEST QUARTER, AND THE EAST HALF OF THE SOUTHWEST QUARTER, AND THE
SOUTHEAST QUARTER OF THE NORTHWEST QUARTER, AND THE NORTHEAST QUARTER OF THE
NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 6, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
EXCEPT FROM LOTS 1 AND 2 AND THE EAST HALF OF THE NORTHWEST QUARTER, ALL OIL AND GAS
AS RESERVED IN PATENT.
PARCEL NO. 5:
SECTION 8, TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND
MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 6:
THE WEST HALF OF THE EAST HALF OF THE EAST HALF OF THE NORTHWEST QUARTER OF THE
NORTHEAST QUARTER AND THE EAST HALF OF THE WEST HALF OF THE EAST HALF OF THE
NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 17, TOWNSHIP 5 NORTH, RANGE
2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 7:
SECTION 9, TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND
MERIDIAN, MARICOPA COUNTY, ARIZONA.
EXCEPT THE SOUTH 40 FEET THEREOF.
PARCEL NO. 8:
SECTION 4, TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND
MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 9:
THE EAST HALF OF SECTION 33, TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT
RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
EXCEPT THOSE CERTAIN FENCES AND ALL APPURTENANCES CONSTRUCTED BY THE UNITED
STATES, AS SET FORTH IN PATENT RECORDED IN DOCKET 2878, PAGE 584, RECORDS OF
MARICOPA COUNTY, ARIZONA.
PARCEL NO. 10:
THE SOUTH HALF OF THE SOUTHWEST QUARTER AND THE EAST HALF OF THE NORTHEAST
QUARTER OF THE SOUTHWEST QUARTER OF SECTION 33, TOWNSHIP 6 NORTH, RANGE 2 WEST OF
THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 11:
THE WEST HALF OF THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER AND THE
NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 33, TOWNSHIP 6 NORTH, RANGE
2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.

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 PARCEL NO. 12:
THE EAST HALF OF THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 33,
TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN,
MARICOPA COUNTY, ARIZONA.
PARCEL NO. 13:
THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 33, TOWNSHIP 6 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 14:
THE EAST HALF OF THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 33,
TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN,
MARICOPA COUNTY, ARIZONA.
PARCEL NO. 15:
THE WEST HALF OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 33,
TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN,
MARICOPA COUNTY, ARIZONA.
PARCEL NO. . 16:
THE NORTH HALF OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF THE NORTHWEST
QUARTER OF SECTION 33, TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER
BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 17:
THE SOUTH HALF OF THE NORTH HALF OF THE SOUTHWEST QUARTER OF THE NORTHWEST
QUARTER OF SECTION 33, TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER
BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 18:
THE SOUTH HALF OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 33,
TOWNSHIP 6 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN,
MARICOPA COUNTY, ARIZONA.
PARCEL NO. 19:
THE SOUTHWEST QUARTER OF SECTION 10, TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND
SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 20:
THE NORTHWEST QUARTER OF SECTION 15, TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND
SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA;

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 EXCEPT ALL COAL AND MINERALS AS RESERVED IN PATENT FROM UNITED STATES OF AMERICA.
PARCEL NO. 21:
THE SOUTH HALF OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 10,
TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN,
MARICOPA COUNTY, ARIZONA.
PARCEL NO. 22:
THE NORTH HALF OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 10,
TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN,
MARICOPA COUNTY, ARIZONA.
PARCEL NO. 23:
THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 10, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 24:
THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 10, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 25:
THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 3, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 26:
THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 3, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 27:
THE NORTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 3, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 28:
THE SOUTH HALF OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 3,
TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA
COUNTY, ARIZONA.
PARCEL NO. 29:
THE NORTH HALF OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 3,
TOWNSHIP 5 NORTH, RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA
COUNTY, ARIZONA.

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 PARCEL NO. 30:
THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 3, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 31:
THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 3, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
PARCEL NO. 32:
THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 3, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
EXCEPT THOSE CERTAIN FENCES AND ALL APPURTENANCES CONSTRUCTED BY THE UNITED STATES,
AS SET FORTH IN PATENT RECORDED IN DOCKET 2878, PAGE 584, RECORDS OF MARICOPA COUNTY,
ARIZONA.
PARCEL NO. 33:
THE NORTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 3, TOWNSHIP 5 NORTH,
RANGE 2 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
EXCEPT THOSE CERTAIN FENCES AND ALL APPURTENANCES CONSTRUCTED BY THE UNITED STATES,
AS SET FORTH IN PATENT RECORDED IN DOCKET 2878, PAGE 584, RECORDS OF MARICOPA COUNTY,
ARIZONA.
PARCEL NO. 34:
THE NORTHEAST QUARTER OF THE NORTHEAST QUARTER OF SECTION 12, TOWNSHIP 5 NORTH,
RANGE 3 WEST OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA.
EXCEPT ALL COAL AND OTHER MINERALS AS RESERVED IN PATENT FROM UNITED STATES OF
AMERICA.

End of legal description

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