HomeMy WebLinkAbout202-25 RESOLUTION
Page 1
113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 202-25
File Number: 2025-1484
A RESOLUTION TO APPROVE A COST SHARE AGREEMENT REQUIRING SOUTH CATO SPRINGS
HOLDINGS, LLC TO PROVIDE UP TO THE ESTIMATED AMOUNT OF $1,960,527.00 TO INCREASE
THE CAPACITY OF PLANNED SEWER INFRASTRUCTURE IMPROVEMENTS TO SERVE ITS
DEVELOPMENT, AND TO APPROVE AMENDMENT # 1 TO THE ECONOMIC DEVELOPMENT
PROJECT CONTRACT WITH SOUTH CATO SPRINGS HOLDINGS, LLC
WHEREAS, South Cato Springs Holdings, LLC is an impact partner of SLS Community, a local nonprofit
organization committed to establishing an innovative, replicable live-work-play community where residential,
vocational, health and wellness, community and clinical resources are accessible and affordable to neurodiverse adults
to reach their full potential; and
WHEREAS, on December 6, 2022, City Council passed Resolution 279-22 authorizing an economic development
project agreement between the City of Fayetteville and South Cato Springs Holdings, LLC for infrastructure
development related to the South Cato Springs development project; and
WHEREAS, Resolution 279-22 also authorized the acceptance of a $3,000,000.00 Community Project Funding grant
award from the U.S. Department of Housing and Urban Development for infrastructure support associated with SLS
Community and the South Cato Springs Holdings, LLC development; and
WHEREAS, the City of Fayetteville is applying these Federal grant funds only to the sewer line connection associated
with SLS Community and the South Cato Springs development project and is managing the design and construction of
this project to ensure full compliance with Federal law and HUD Grant Agreement No. B-22-CP-AR-0016; and
WHEREAS, over the past two years, the South Cato Springs development project and its team has expanded with
private investment increasing the planned housing units on the project site, which will improve commercial viability of
operations of the property that are critical to realizing the projects benefits to the neurodiverse community and their
families; and
WHEREAS, in order to bring the necessary sewer capacity to the property to serve the additional housing units
proposed on the site, South Cato Springs Holdings, LLC has agreed to invest up to an estimated $1,960,527.00 of
private funding in addition to the $3,000,000 Community Project Funding grant funds for the design, permitting,
easement acquisition and construction of a sewer infrastructure which will connect the subject properties to the City of
Fayetteville’s sewer system; and
WHEREAS, the amendment to the 2022 Economic Development Project Contract updates certain terms to reflect the
project’s evolution to emphasize housing, aligning with current market needs and community goals, while maintaining
the project’s original public purpose.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
Resolution: 202-25
File Number: 2025-1484
Page 2
ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Rawn to sign a cost
share agreement with South Cato Springs Holdings, LLC, a copy of which is attached to this Resolution, with the
estimated amount of up to $1,960,527.00 to be paid by South Cato Springs Holdings, LLC.
Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves Amendment #1 to the Economic
Development Project Contract with South Cato Springs Holdings, LLC to provide for the prioritization and increase of
residential housing, while preserving the original public purposes of economic and community development.
PASSED and APPROVED on September 2, 2025
Approved:
_______________________________
Molly Rawn, Mayor
Attest:
_______________________________
Kara Paxton, City Clerk Treasurer
Mailing address:
113 W. Mountain Street
Fayetteville, AR 72701
www.fayetteville-ar.gov
CITY COUNCIL MEMO
2025-1484
MEETING OF SEPTEMBER 2, 2025
TO: Mayor Rawn and City Council
THRU: Keith Macedo, Chief of Staff
FROM: Devin Howland, Director of Economic Vitality
SUBJECT: Cost Share Agreement and Economic Development Contract Amendment with South
Cato Springs Holdings
RECOMMENDATION:
Staff recommend approval of a resolution authorizing Mayor Rawn to execute a cost share agreement for
sewer infrastructure and an amendment to the Economic Development Project Contract with South Cato
Springs Holdings, LLC.
BACKGROUND:
Resolution 279-22 established a contractual agreement between the City of Fayetteville and South Cato
Springs Holdings, LLC (“South Cato Springs”) in support of the South Cato Springs/SLS Community economic
development project. The agreement outlines responsibilities for two key infrastructure components necessary
for project advancement:
• Phase 1 Road Construction – To be constructed by South Cato Springs and funded by the City’s 2019
Transportation and Economic Development Bond Program.
• Sanitary Sewer Connection – To be constructed by the City of Fayetteville and funded by a federal
Community Project Funding (CPF) grant awarded through the U.S. Department of Housing and Urban
Development (HUD).
Resolution 19-23 subsequently authorized a professional services agreement with Crafton Tull for engineering
design of the sewer infrastructure. As of May 2025, the Arkansas Department of Health is reviewing the 90%
construction drawings for the proposed sanitary sewer connection. The item was presented to the Water and
Sewer Committee on July 8, 2025.
DISCUSSION:
The Cato Springs project has assembled a strong team of professionals to advance the initiative from concept
to construction. As part of the project’s due diligence, the development team identified the need to increase the
planned sewer capacity in order to support additional residential units on the site. To accommodate this
increase, the proposed cost-share agreement provides that South Cato Springs Holdings will cover costs
exceeding the $3,000,000 in federal funds. The City’s financial obligation remains limited solely to the
$3,000,000 provided through the HUD grant.
The proposed amendment to the 2022 Economic Development Project Contract updates certain terms to
reflect the project’s evolution from a conceptual framework to a market-responsive development approach. Key
Mailing address:
113 W. Mountain Street
Fayetteville, AR 72701
www.fayetteville-ar.gov
modifications include the requirement that within five years of infrastructure completion, the project must
deliver a minimum of 200 residential units. Within ten years of infrastructure completion, the project must also
include a healthcare or wellness facility serving neurodiverse adults, as well as a facility dedicated to research,
technology, job training, or corporate headquarters. This amendment reinforces the City’s economic
development objectives while responding to community needs by advancing both housing production and
inclusive innovation.
BUDGET/STAFF IMPACT:
The City’s financial obligation shall not exceed the $3,000,000 in federal grant funds allocated through HUD
Grant Agreement No. B-22-CP-AR-0016.
ATTACHMENTS: 3. Staff Review Form , 4. South Cato Cost Share Agreement, 5. Amendment to Economic
Development Project Contract, 6. Economic Development Project Contract
Page 1
City of Fayetteville, Arkansas
Legislation Text
113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
File #: 2025-1484
A RESOLUTION TO APPROVE A COST SHARE AGREEMENT REQUIRING SOUTH CATO
SPRINGS HOLDINGS, LLC TO PROVIDE UP TO THE ESTIMATED AMOUNT OF
$1,960,527.00 TO INCREASE THE CAPACITY OF PLANNED SEWER INFRASTRUCTURE
IMPROVEMENTS TO SERVE ITS DEVELOPMENT, AND TO APPROVE AMENDMENT # 1
TO THE ECONOMIC DEVELOPMENT PROJECT CONTRACT WITH SOUTH CATO
SPRINGS HOLDINGS, LLC
WHEREAS, South Cato Springs Holdings, LLC is an impact partner of SLS Community, a local
nonprofit organization committed to establishing an innovative, replicable live-work-play community
where residential, vocational, health and wellness, community and clinical resources are accessible and
affordable to neurodiverse adults to reach their full potential; and
WHEREAS, on December 6, 2022, City Council passed Resolution 279-22 authorizing an economic
development project agreement between the City of Fayetteville and South Cato Springs Holdings, LLC
for infrastructure development related to the South Cato Springs development project; and
WHEREAS, Resolution 279-22 also authorized the acceptance of a $3,000,000.00 Community Project
Funding grant award from the U.S. Department of Housing and Urban Development for infrastructure
support associated with SLS Community and the South Cato Springs Holdings, LLC development; and
WHEREAS, the City of Fayetteville is applying these Federal grant funds only to the sewer line
connection associated with SLS Community and the South Cato Springs development project and is
managing the design and construction of this project to ensure full compliance with Federal law and
HUD Grant Agreement No. B-22-CP-AR-0016; and
WHEREAS, over the past two years, the South Cato Springs development project and its team has
expanded with private investment increasing the planned housing units on the project site, which will
improve commercial viability of operations of the property that are critical to realizing the projects
benefits to the neurodiverse community and their families; and
WHEREAS, in order to bring the necessary sewer capacity to the property to serve the additional
housing units proposed on the site, South Cato Springs Holdings, LLC has agreed to invest up to an
estimated $1,960,527.00 of private funding in addition to the $3,000,000 Community Project Funding
grant funds for the design, permitting, easement acquisition and construction of a sewer infrastructure
which will connect the subject properties to the City of Fayetteville’s sewer system; and
WHEREAS, the amendment to the 2022 Economic Development Project Contract updates certain terms
to reflect the project’s evolution to emphasize housing, aligning with current market needs and
community goals, while maintaining the project’s original public purpose.
Resolution: 202-25
File Number: 2025-1484
Page 2
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Rawn to
sign a cost share agreement with South Cato Springs Holdings, LLC, a copy of which is attached to this
Resolution, with the estimated amount of up to $1,960,527.00 to be paid by South Cato Springs
Holdings, LLC.
Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves Amendment #1
to the Economic Development Project Contract with South Cato Springs Holdings, LLC to provide for
the prioritization and increase of residential housing, while preserving the original public purposes of
economic and community development.
Page 1
113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 202-25
File Number: 2025-1484
A RESOLUTION TO APPROVE A COST SHARE AGREEMENT REQUIRING SOUTH CATO SPRINGS
HOLDINGS, LLC TO PROVIDE UP TO THE ESTIMATED AMOUNT OF $1,960,527.00 TO INCREASE
THE CAPACITY OF PLANNED SEWER INFRASTRUCTURE IMPROVEMENTS TO SERVE ITS
DEVELOPMENT, AND TO APPROVE AMENDMENT # 1 TO THE ECONOMIC DEVELOPMENT
PROJECT CONTRACT WITH SOUTH CATO SPRINGS HOLDINGS, LLC
WHEREAS, South Cato Springs Holdings, LLC is an impact partner of SLS Community, a local nonprofit
organization committed to establishing an innovative, replicable live-work-play community where residential,
vocational, health and wellness, community and clinical resources are accessible and affordable to neurodiverse adults
to reach their full potential; and
WHEREAS, on December 6, 2022, City Council passed Resolution 279-22 authorizing an economic development
project agreement between the City of Fayetteville and South Cato Springs Holdings, LLC for infrastructure
development related to the South Cato Springs development project; and
WHEREAS, Resolution 279-22 also authorized the acceptance of a $3,000,000.00 Community Project Funding grant
award from the U.S. Department of Housing and Urban Development for infrastructure support associated with SLS
Community and the South Cato Springs Holdings, LLC development; and
WHEREAS, the City of Fayetteville is applying these Federal grant funds only to the sewer line connection associated
with SLS Community and the South Cato Springs development project and is managing the design and construction of
this project to ensure full compliance with Federal law and HUD Grant Agreement No. B-22-CP-AR-0016; and
WHEREAS, over the past two years, the South Cato Springs development project and its team has expanded with
private investment increasing the planned housing units on the project site, which will improve commercial viability of
operations of the property that are critical to realizing the projects benefits to the neurodiverse community and their
families; and
WHEREAS, in order to bring the necessary sewer capacity to the property to serve the additional housing units
proposed on the site, South Cato Springs Holdings, LLC has agreed to invest up to an estimated $1,960,527.00 of
private funding in addition to the $3,000,000 Community Project Funding grant funds for the design, permitting,
easement acquisition and construction of a sewer infrastructure which will connect the subject properties to the City of
Fayetteville’s sewer system; and
WHEREAS, the amendment to the 2022 Economic Development Project Contract updates certain terms to reflect the
project’s evolution to emphasize housing, aligning with current market needs and community goals, while maintaining
the project’s original public purpose.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
Resolution: 202-25
File Number: 2025-1484
Page 2
ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby authorizes Mayor Rawn to sign a cost
share agreement with South Cato Springs Holdings, LLC, a copy of which is attached to this Resolution, with the
estimated amount of up to $1,960,527.00 to be paid by South Cato Springs Holdings, LLC.
Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves Amendment #1 to the Economic
Development Project Contract with South Cato Springs Holdings, LLC to provide for the prioritization and increase of
residential housing, while preserving the original public purposes of economic and community development.
PASSED and APPROVED on September 2, 2025
Approved:
_______________________________
Molly Rawn, Mayor
Attest:
_______________________________
Kara Paxton, City Clerk Treasurer
8/8/2025
Submitted Date
No
2,665,444.98$
-$
V20221130
Budgeted Item?
Does item have a direct cost?
Is a Budget Adjustment attached?
Total Amended Budget
Expenses (Actual+Encum)
Available Budget
Item Cost
Budget Adjustment
Remaining Budget
6,481,422.00$
3,815,977.02$
Yes
No -$
2,665,444.98$
46060.7650
Project Number
Budget Impact:
Economic Development 2019 Bonds
SLS Community - S Cato Springs
Fund
Bond Program (Economic Development 2019
Bonds)4601.860.7650-5815.00
Account Number
Project Title
City of Fayetteville Staff Review Form
2025-1484
Item ID
9/2/2025
City Council Meeting Date - Agenda Item Only
Staff recommend approval of a resolution authorizing Mayor Rawn to execute a cost share agreement for sewer
infrastructure and an amendment to the Economic Development Project Contract with South Cato Springs
Holdings, LLC.
N/A for Non-Agenda Item
Action Recommendation:
Submitted By
Devin Howland ECONOMIC DEVELOPMENT (050)
Division / Department
Comments:
Purchase Order Number:
Change Order Number:
Previous Ordinance or Resolution #279-22
Approval Date:12/6/2022
Original Contract Number:
1
CONTRACTUAL AGREEMENT FOR
COST SHARE OF SEWER INFRASTRUCTURE COSTS
This Agreement, made and entered into on this day of ____________________, 2025,
by and between the City of Fayetteville, Arkansas (the “City”) and South Cato Springs Holdings,
LLC (“Holdings”), witnesseth:
WHEREAS, pursuant to Grant Agreement No. B-22-CP-AR-0016, the United States
Department of Housing and Urban Development (“HUD”) awarded Three Million Dollars
($3,000,000) (the “HUD Grant”) to the City for the express and exclusive purpose of financing
public infrastructure that will serve the Cato Springs mixed-use development (the “Project”) and
advance housing, employment, and supportive-services opportunities for neurodiverse adults
championed by SLS Community, an Arkansas non-profit corporation; and
WHEREAS, on December 6, 2022, the Fayetteville City Council adopted Resolution 279-
22, accepting the HUD Grant and authorizing that certain Economic Development Project Contract
(the “Economic Development Project Contract”) with Holdings that designates the Project—and,
in particular, SLS Community’s neurodiversity mission—as the sole beneficiary of “Project
Funds” (as defined in the Economic Development Project Contract); and
WHEREAS, the parties acknowledge that the sewer main, pump station, and related
facilities financed in whole or in part with the HUD Grant (collectively, the “HUD-Funded
Capacity”) shall be engineered and sized exclusively to satisfy the present and reasonably
anticipated future demands of the Project and SLS Community’s facilities and are not intended to
furnish excess capacity for parcels or developments outside the Project area; and
WHEREAS, diversion, assignment, or reservation of any portion of the HUD-Funded
Capacity to neighboring landowners or third parties would contravene the stated federal purpose
of the HUD Grant, impair the City’s compliance with grant conditions, and diminish the substantial
public benefits earmarked for neurodiverse adults; and
WHEREAS, Holdings has agreed to contribute private funds to up-size segments of the
sewer main solely to ensure adequate service for the Project and the SLS Community facilities,
and such private contribution shall not expand capacity for, nor confer any right upon, non-Project
parcels; and
WHEREAS, the Parties acknowledge that any future developments or properties seeking
to connect to the sewer infrastructure financed under this Agreement shall be required to perform
their own engineering analyses to demonstrate available capacity, and, if necessary, to fund and
construct any improvements or upsizing needed to accommodate their respective sewer demands
without reducing or impairing the capacity engineered and funded to serve the Project and SLS
Community facilities; and
2 September
2
WHEREAS, the Parties intend that these recitals and the covenants herein run with the land
comprising the Project and bind their respective successors and assigns, thereby providing notice
that the HUD-Funded Capacity is dedicated to the Project and may not be claimed or utilized by
adjacent or future developments.
NOW, THEREFORE, the City and Holdings agree as follows:
1.The City agrees to:
A.Manage the design, permitting, easement acquisition and construction of the
sewer infrastructure project consistent with the Scope of Work set forth on
Appendix A.
B.Own and operate the sewer system as public infrastructure, including the proposed
pumping station, in accordance with applicable federal, state, and local laws and
regulations.
C.Contribute $3,000,000 in funding from HUD Grant Agreement No. B-22-CP-AR-
0016 towards the design and construction of the sewer-line infrastructure project,
including easement acquisition and construction observation services.
D.Provide Holdings with regular updates, and allow Holdings the opportunity to
participate in the management of the project consistent with the Scope of Work.
E.Obtain written consent from Holdings through a change order process for any
modifications to the Scope of Work.
F.Amend the Economic Development Project Contract to (i) affirm the City’s
commitment to the Project and provide that Holdings is in good standing, and not
in breach of its obligations; and (ii) restate the project milestone in Section 4(C)
of the Economic Development Project Contract to reflect the Project’s pivot
toward delivering more housing.
2.Holdings agrees to:
A.Pay the City up to $1,960,527 (representing the estimated cost of the project
described in the Scope of Work in excess of $3,000,000) as last-in funds if
and when such funds are required.
B.Dedicate all easements necessary for the construction of the sewer
infrastructure project within ninety days after execution of this contract.
3
C.Pay any remaining balance if the total actual cost of construction exceeds the
estimates.
D.Payments due under this Agreement shall be remitted within thirty days of
receipt of invoices from the City.
E.Amend the Economic Development Project Contract to (i) affirm the City's
commitment to the Project and provide that Holdings is in good standing,
and not in breach of its obligations; and (ii) restate the project milestone in
Section 4(C) of the Economic Development Project Contract to reflect the
Project's pivot toward delivering more housing.
3.The City’s only financial obligation shall be to participate in this cost share
agreement and contribute a not-to-exceed amount of $3,000,000 in federal funds
for the project set forth in the Scope of Work.
IN AGREEMENT WITH ALL THE TERMS AND CONDITIONS ABOVE, WE SIGN BELOW:
SOUTH CATO SPRINGS HOLDINGS, LLC
By:�r �CHARLES E. WIGGIN, Authorized Signatory
ATTEST: � A C7 1 B y ��cc!_PAUL SELID
4
CITY OF FAYETTEVILLE, ARKANSAS
By:
MOLLY RA WN, Mayor
ATTEST:
By: _________ _ KARA PAXTON, City Clerk Treasurer
5
Appendix A
Scope of Work
This sewer project is designed to extend sanitary sewer service to Kessler Mountain Regional
Park. The proposed project alignment begins at Town Branch Creek Interceptor and replaces the
existing sewer with 15” gravity line to the southwest corner of the Red Arrow Subdivision. From
that southwest corner, a 15” gravity line will be extended to the existing 8” sewer pipe under
Interstate 49. From the west side of Interstate 49, a 10” force main will extend south along
Shiloh Drive and then south and around the hill to South Cato Springs Road to the proposed lift
station site. From that point, gravity sewer from 15” to 8” in size will extend along the unnamed
creek west and then south to the existing onsite treatment plant at Kessler Mountain Regional
Park. The proposed project is designed to provide 1125 gpm of sanitary sewer capacity to the lift
station basin.
AMENDMENT TO ECONOMIC DEVELOPMENT PROJECT CONTRACT
THIS AMENDMENT (this “Amendment”) to the Economic Development Project Contract (the
“Agreement”) dated December 6, 2022, by and between the City of Fayetteville, Arkansas, an Arkansas
municipal corporation (the “City”), and South Cato Springs Holdings, LLC (the “Company”), is entered
into effective as of July __, 2025 (the “Effective Date”). Capitalized terms used herein that are not
otherwise defined will have the meanings ascribed to them in the Agreement.
WITNESSETH
WHEREAS, the City and the Company previously entered into the Agreement to support
economic development and the creation of employment opportunities through public infrastructure
improvements that will support Kessler Mountain Regional Park and the Company’s mixed-use
development project in Fayetteville, Arkansas (the “Project”);
WHEREAS, both parties hereby confirm that, as of the date hereof, no defaults or breaches exist
under the Agreement;
WHEREAS, the parties acknowledge that the scope of the Project has evolved to emphasize
residential housing, aligning with the current market needs and community goals, while still maintaining
the original public purpose described in Section 2 of the Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein,
the parties hereby agree as follows:
1.Confirmation of Compliance. The City and the Company each confirm and acknowledge that, as
of the Effective Date, there exist no defaults or breaches under the Agreement by either party.
2.Acknowledgment of Project Scope. The parties hereby acknowledge that the Project’s scope has
pivoted to prioritize and increase residential housing capacity, enhancing housing opportunities in
Fayetteville, while preserving the Project’s original public purposes as set forth in Section 2 of the
Agreement, including the economic and community development benefits originally
contemplated.
3.Infrastructure Completion Date. The definition of the “Infrastructure Completion Date” shall
mean actual completion of the Project-related infrastructure, including both (i) the road that is
referred to in the Agreement, and (ii) the sewer infrastructure that is subject to that certain
Contractual Agreement for Cost Share of Sewer Infrastructure Costs, dated on or about the date
hereof.
4.Restatement of Project Milestones. Section 4.C of the Agreement is amended and restated in its
entirety as follows:
“C. Certificates of Occupancy. Company shall:
(1) within five (5) years after the Infrastructure Completion Date, obtain final certificates
of occupancy for 200 residential units; and
(2) within ten (10) years after the Completion Date, obtain final certificates of occupancy
for: (i) a healthcare, wellness, or related service facility with special accommodation for a
neurodiverse population, and (ii) a research, technology or development facility; or a job
training facility; or a regional or national corporate headquarters facilities.”
5.All other provisions, terms, and conditions of the Agreement not explicitly amended herein
remain unchanged and shall continue in full force and effect.
[Signatures on the Following Page]
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the date first
written above.
CITY OF FAYETTEVILLE, ARKANSAS
By:
Name:
Title:
Date:
ATTEST:
By:
SOUTH CATO SPRINGS HOLDINGS, LLC
By:
Charles E. Wiggin, Authorized Signatory
Date: August 7, 2025
Mayor
Molly Rawn
09/02/2025
Kara Paxton, City Clerk Treasurer
ECONOMIC DEVELOPMENT PROJECT CONTRACT
THIS ECONOMIC DEVELOPMENT PROJECT CONTRACT ("Contract") is made and
entered into as of the day of , 2022 ("Effective Date"), by and
between South Cato Springs Holdings, LLC, an Arkansas limited liability company authorized
to do business in the State of Arkansas (the "Company"), and the City of Fayetteville, Arkansas,
an Arkansas municipal corporation (the "City").
WITNESSETH
WHEREAS, the City is authorized to make economic development funds available to or
for the benefit of qualified applicants for certain economic development projects pursuant to the
Local Job Creation, Job Expansion, and Economic Development Act of 2017, Ark. Code Ann. §
14-176-101, et seq.; and
WHEREAS, the funding is provided by economic development bonds issued in
accordance with Arkansas Constitution, Amendment 62; and
WHEREAS, the appropriation of funds by the City for infrastructure improvements that
will be of benefit to the Company will permit the addition of new employment opportunities in the
City of Fayetteville; and
WHEREAS, the funds provided under this Contract will be utilized to undertake certain
public infrastructure improvements that will support Kessler Mountain Regional Park and the
Company's mixed -use development project in Fayetteville, Arkansas (the "Project"); and
WHEREAS, in accordance with Ark. Code Ann. § 14-176-104(a)(1), the City Council of
the City of Fayetteville, Arkansas has reviewed and approved an economic impact and cost -benefit
analysis of the proposed project; and
WHEREAS, in accordance with Ark. Code Ann. § 14-176-104(b)(3), the City Council of
the City of Fayetteville, Arkansas has made a public finding that multiple years are necessary for
the success of the proposed project and that multiple years are both lawful and a matter of public
benefit.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties hereby agree as follows:
1. Appropriation. Subject to the terms and conditions set forth in this Contract, the City agrees
to appropriate economic development bond funds to be used for the construction of public
infrastructure in the amount of $3,480,000 (the "Project Funds").
2. Public Purpose. The purpose of the Project Funds is to appropriate funding for the
construction of public infrastructure for the Company's Project that supports private sector
job creation opportunities pursuant to the Local Job Creation, Job Expansion, and Economic
Page 1 of 10
Development Act of 2017, Ark. Code Ann. § 14-176-101, et seq. The Project Funds will be
utilized only for public infrastructure improvements that will serve the Project.
3. Term. This Contract shall expire in accordance with Section 8 below unless extended by
mutual written agreement of the City and the Company.
4. Project Milestones. Company acknowledges that its commitment to create employment
opportunities for Fayetteville residents is a material inducement for the City to enter into this
Contract and to make the Project Funds available to the Company. Therefore, all or a portion
of the Project Funds will be subject to recapture by the Company to the City should it fail to
satisfy the provisions of this Section 4 (the "Project Milestones"):
A. Technical Engineering, Design, and Construction of Public Infrastructure. The
City agrees to utilize economic development funds in the amount of $3,480,000 for
engineering, design, and construction of public infrastructure needed for the Project
including, but not limited to, streets, and water, sewer, and stormwater infrastructure.
Construction is estimated to be substantially completed by December 31, 2024. The date
of the actual completion of the Project -related infrastructure will be referred to as the
Infrastructure Completion Date". A diagram showing the location, general design, and
estimated costs of the Project -related infrastructure is attached hereto as Exhibit A and
incorporated herein. Within ninety (90) days of the Effective Date, the Company and
the City will agree on a more detailed description of the Project -related infrastructure.
All public infrastructure shall meet or exceed the specifications contained in the
Fayetteville City Code, the Fayetteville Unified Development Code, the Master Street
Plan, the Minimum Street Standards, the Standard Specifications for Street and
Drainage Construction, City Standard Details, and the Standard Specifications for
Design and Construction of Water Lines and Sewer Lines, 2022 Edition, as may be
amended from time to time, and any other applicable manual, code, ordinance, or
statute.
Company shall dedicate all rights of way and easements necessary for the construction
of the Project -related public infrastructure at no cost to the City within 90 days after the
execution of this Contract.
B. Commencement of Work. Company shall, within two hundred and forty (240) days
after the execution of this Contract, begin work on the Project. This Milestone shall be
considered satisfied if the Company has: 1) applied for and received development
permits; 2) mobilized equipment and materials on the Project site; and 3) begun grading
or other physical construction activities on the Project site.
C. Certificates of Occupancy. Company shall, within five years after the Infrastructure
Completion Date, obtain final certificates of occupancy for:
i. A healthcare, wellness, or related services facility with special accommodations
for a neurodiverse population; and
ii. A facility of a specialized technology employer.
Page 2 of 10
D. Quarterly Progress Reports. Company shall provide a report to the City on or before
the first day of each quarter following the execution of this Contract providing:
i. A written financial accounting of the use of the moneys with documentation
generally acceptable to Arkansas Legislative Audit's requirements; and
ii. A statement of the specific items contained in this Contract and articulation of
compliance as to each item including, but not limited to, the Company's
progress toward, or achievement of, the Project Milestones.
Each report shall be certified by an officer of the Company as true and accurate in all
material respects to the best of his/her knowledge and belief. Such quarterly progress
reports shall also be considered Project Milestones.
E. Final Report. Company shall provide its final report to the City containing the
information required by Section 4.1) on or before the last day of the quarter in which the
Certificates of Occupancy as set forth in 4.0 are issued.
5. Disbursement of Project Funds. The City will follow its standard purchasing and
accounting practices with respect to the disbursement of project funds for the infrastructure
improvements.
It is expressly agreed and understood that upon execution of the Agreement, the City agrees
to allocate no more than the amount of $3,480,000 for full and complete satisfactory
performance of this Contract. Company shall not be entitled to receive any additional or
separate compensation from the City in connection with the project without prior written
approval of the City.
Drawdowns for the payment of eligible expenses shall be made in accordance with
performance. Company may invoice the City monthly. Invoices shall state the period for
which reimbursement is being requested and will itemize the costs for each drawdown.
Copies of invoices and other supporting documentation shall be attached.
Payments due to Company shall be remitted within sixty (60) days after receipt of valid
invoices, and pending successful inspection and acceptance of the completed work by the
City.
6. Project Cost Recapture. In the event the Company fails to satisfy the Project Milestones set
forth in Section 4, a portion of the Project Funds shall be reimbursed by the Company to the
City as follows:
A. If Company has not received the required final Certificates of Occupancy by the fifth
anniversary of the Infrastructure Completion Date, the City shall be entitled to recapture
890,000.00.
B. If Company fails to satisfy a Project Milestone set forth in Section 4 the City may pass
a Resolution within 90 days after the relevant Project Milestone date demanding a
Page 3 of 10
refund and authorizing a cause of action to recapture the funds in the Circuit Court of
Washington County, Arkansas in the event Company does not remit the refund payment
upon demand.
C. Any refund payment required for whatever reason under this Contract shall be paid by
the Company to the City within a reasonable time (but in no event more than 45 days)
after receiving written notice of demand (the "Refund Obligation").
D. In no event will the Company be obligated to refund more than $890,000.00 plus any
out-of-pocket expenses incurred by the City in collecting any amounts owed by the
Company.
E. The Company's failure to meet the Project Milestones detailed in Section 4 shall subject
the Company to termination of the Contract for Good Cause as provided in Section 8
below as well as the recapture provisions of this Section 6.
7. Contracts, Obligations, Representations, and Warranties of the Company.
A. The Company represents and warrants it is authorized to do business in the State of
Arkansas.
B. The Company represents and warrants the making and performance of this Contract
along with each and every other document required to be delivered hereunder, as well
as the performance of the Project are within its respective powers, have been duly
authorized by all necessary action, have received all necessary approvals, and do not
contravene any law, regulation or decree or any contractual restriction.
C. The Company represents and warrants this Contract and each and every other document
required to be delivered hereunder, when duly executed and delivered, will be the legal
and binding obligations of the Company enforceable in accordance with their respective
terms.
D. The Company represents and warrants, to the best of the Company's knowledge, there
are no pending or threatened actions or proceedings before any court or administrative
agency which may materially adversely affect the financial condition or operation of the
Company.
E. Cooperation. The Company agrees to use commercially reasonable efforts to abide by
and adhere to the directives, rules, regulations, and other requirements issued by the
City arising out of this Contract.
F. Financial Management and Accounting. The Company will use commercially
reasonable efforts to establish and maintain a financial management and accounting
Page 4 of 10
system that materially conforms to generally accepted accounting principles and that
complies with the Arkansas Legislative Audit's requirements.
G. Indemnification. The Company will defend, protect, and save harmless the City from
and against all claims, suits, and actions arising from any negligent or tortious act or
omission of the Company or any employee or agent of the Company in the performance
of this Contract.
H. Record Keeping. The Company agrees to keep reasonably necessary records pertinent
to the Project Funds and this Contract.
i. Access to Records. The Company agrees the City and duly authorized officials
of the City will have full access and the right to examine (but not copy or
remove from the Company's premises) any pertinent documents, papers,
records, and books of the Company related to the terms and obligations of this
Contract.
ii. Reports. The Company shall be required to maintain and provide to the City the
quarterly progress reports required by Section 4 of this Contract. Furthermore,
the Company, at such times and in such forms as the City may reasonably
require, will furnish the City with such other reports as it may reasonably
request pertaining to the activities undertaken pursuant to this Contract, the
costs and obligations incurred in connection therewith, and any other matters
covered by this Contract. All reports submitted by the Company shall be
certified by an officer of the Company as true and accurate in all material
respects to the best of his/her knowledge and belief.
iii. Confidentiality. The City agrees to keep all information obtained from the
Company pursuant to this Contract confidential to the extent permitted by law.
Company acknowledges that the City is subject to the Arkansas Freedom of
Information Act ("FOIA") and that certain information concerning the Project
and this Contract may be subject to disclosure under FOIA, to the extent not
otherwise exempted. In the event that the City receives a request for disclosure
of Project information under FOIA, it will only disclose that material which in
the opinion of City's counsel the City is legally obligated to disclose.
8. Close-out, Good Cause, Termination, and Remedies.
A. Close -Out. If all Project Funds have been disbursed and the Company has satisfied the
Project Milestones, the City shall pass a resolution confirming the completion of the
Project, at which time this Contract shall terminate.
B. Termination by Mutual Agreement. This Contract may be terminated, in whole or in
part, prior to the completion of the Project when the City and the Company mutually
determine that continuation is not feasible or would not produce beneficial results
commensurate with the further expenditure of Project Funds.
Page 5 of 10
C. Termination by Company. The Company may terminate this Contract at any time,
with or without cause, upon seven (7) days written notice and the reimbursement to the
City of all Project Funds previously disbursed under this Contract.
D. Notice of Termination. Except as otherwise provided herein, the City may only
terminate this Contract (a) for Good Cause, (b) upon 30 days prior written notice to the
Company, and (c) upon the Company having an opportunity to cure. The City's notice
shall include: (1) the Company's act or omission constituting Good Cause, (2) the time
period in which to cure, (3) the act or omission necessary to cure such Good Cause, and
4) the provisional termination date. The Company shall have 30 days after receipt of
notice to cure the Good Cause (the "Cure Period").
E. Termination for Good Cause.
Events Constituting Good Cause. Only the following events shall constitute
Good Cause" for termination:
Any Company representation or warranty made in connection with the
execution and delivery of this Contract or any other document executed
in connection herewith or in any certificate furnished pursuant hereto
shall prove to be, at any time, materially incorrect or untrue;
The Company fails to satisfy any Project Milestone as set forth in
Section 4;
The Company materially defaults in the performance of any other term,
covenant, or obligation contained in this Contract;
The Company shall become insolvent or bankrupt or have ceased
operations or cease paying its debts as they mature;
The Company makes an assignment of or for the benefit of creditors, or
a trustee or receiver or liquidator shall be appointed for the Company,
for all or substantially all of its assets, or
A bankruptcy, reorganization, arrangement, insolvency, or similar
proceedings shall be instituted by or against the Company under the law
of any jurisdiction (provided, however, that in the event an involuntary
bankruptcy action is commenced against the Company, then the
Company shall have 90 days to secure the dismissal of such action).
ii. Recovery of Funds. If the City terminates this Contract for Good Cause and the
Company does not voluntarily cure the reason for termination for cause in
accordance with Section 8.D. of this Contract, the City may institute actions to
recover a portion of the Project Funds paid by the City up to the amount of
890,000.00 plus any out-of-pocket expenses incurred by the City in collecting
any amounts owed by the Company. If an uncured Good Cause exists after the
lapse of the Cure Period, the City shall be entitled to declare any disbursed
Project Funds plus any out-of-pocket expenses incurred by the City in collecting
any amounts owed by the Company immediately due and payable and
Page 6 of 10
immediately collect from the Company all such Project Funds and collection
expenses.
F. Other Enforcement Actions. Notwithstanding anything else herein to the contrary,
after 10 days written notice to the Company, the City may:
i. Conduct a site visit to examine pertinent records and recommend remedial
courses of action,
ii. Issue informal letters of warning advising either party of a deficiency,
recommended cures for such deficiency, date by which deficiency must be
cured, and notice that more serious sanctions may be imposed if the deficiency
continues or is repeated,
iii. Request additional information from either party to verify the nature of
performance,
iv. Reasonably withhold or delay any further payment of Project Funds pending
corrective action by the responsible parties, or
V. Institute a civil action for the remedies and damages herein permitted.
9. Miscellaneous.
A. Amendments and Modifications. This Contract may only be modified through a
written amendment signed by the City and the Company.
B. Conflict of Interest. No officer or employee of the City, no member of the governing
body of the jurisdiction in which the Project is undertaken or located and no other
official of such locality or localities who exercises any functions or responsibilities with
respect to the Project during his tenure, will have any personal pecuniary gain or interest,
direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be
performed in connection with the Project assisted under this Contract. The Company
will promptly notify the City should it become aware of any violation or attempt at
circumventing the requirements of this section by any party.
C. Governing Law. This Contract shall be governed by the laws of the State of Arkansas.
The parties agree that the Circuit Court of Washington County, Arkansas shall have
exclusive jurisdiction over any proceeding arising under this Contract. Nothing in this
contract is intended to nor shall waive the sovereign immunity of City.
D. Notice. All communications and notices provided for hereunder shall be in writing and
mailed or delivered to the parties hereto at their business addresses set forth below or,
as to each party, at such other address as shall be designated by such party in a written
notice to the other parties.
i. If to the Company, then to: South Cato Springs Holdings, LLC c/o Phigenics,
LLC, Attn: Matthew R. Zakaras, 4375 N. Vantage Drive, #104, Fayetteville,
AR 72703
Page 7 of 10
ii. If to the City, then to: Mayor Lioneld Jordan, 113 W. Mountain Street,
Fayetteville, AR 72701
E. Obligations regarding Third Party Relationships. The Company will remain fully
obligated under the provisions of this Contract notwithstanding their designation of any
third party or parties for the undertaking of all or any part of the Project. Any
subcontractor who is not the Company will comply with all lawful requirements of the
Company necessary to ensure the Project is carried out in accordance with the
provisions of this Contract. The Company shall secure all such services in accordance
with applicable State or local law and the provisions of this Contract.
F. Severability. If any provision under this Contract or its application to any person or
circumstances is held invalid by any court of competent jurisdiction, this invalidity does
not affect other provisions of this Contract which can be given effect without the invalid
provision.
G. Successors and Assigns. This Contract shall be binding upon and inure to the benefit
of the Company and the City, and their respective personal representatives, successors
and assigns, except the Company may not assign or transfer its rights hereunder without
the prior written consent of the City.
H. Waivers. No failure to exercise and no delay in exercising, any right, power, or remedy
hereunder on the part of the City or Company shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power, or remedy preclude any other or further
exercise thereof or the exercise of any other right, power, or remedy. No express waiver
shall affect any event or default other than the event or default specified in such waiver,
and any such waiver, to be effective, must be in writing and shall be operative only for
the time and to the extent expressly provided by the City or Company therein. A waiver
of any covenant, term, or condition contained herein shall not be construed as a waiver
of any subsequent breach of the same covenant, term, or condition.
I. Third Parties. The City and the Company are the only parties to this Contract and
nothing in this Contract, express or implied, is intended to or shall confer any rights,
benefits, or remedies upon any other parry.
Page 8 of 10
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed as of the
Effective Date.
CITY OF VJ YETTEVIRE, ARKANSAS:
lufM"l li -(1WA rb .
ATTEST: ``.`RK rTRF''• yG • C"1 Y ' 9sG•.
By: ; F ET7EVILLE;;
30=
RA P TON, City lerk-Trea urer
i9iS' ' 9;'ANSPc; •' `
SOUTH CATO SPRINGS HOLDINGS, LLC
IA
11/16/2022
MATTHEW R. ZXARAS, Authorized Signatory Date
Page 9 of 10