NARRATIVE (REVISED NOVEMBER 2, 2010)

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1 CITY OF GOODYEAR REZONE APPLICATION NARRATIVE (REVISED NOVEMBER 2, 2010) SUBJECT PARCEL SE Corner of 158 th Ave. & Roosevelt Ave. Goodyear, Arizona Proposed Roosevelt Self Storage Facility & Neighborhood Retail Center Land Owners: FFH Rental I, LLC Ira & Jason Feldman Ownership Represented By: Tom Schoaf

2 OVERVIEW OF REQUEST The subject of this rezoning request is an approximately 7.8 acre parcel currently zoned PAD with permitted use of Townhomes [8-15 dwelling units per acre], located at the Southeast corner of 158 th Avenue and Roosevelt Street. It is currently vacant land being used by a Tenant Farmer and is classified as AG by the Maricopa County Assessor. The parcel is surrounded by a mixture of residential and commercially zoned developments. After careful analysis, the ownership has concluded that this parcel cannot be developed under its current zoning. Their analysis has identified a current need for self storage units in this area of the City and they project a future need in this neighborhood for a small, neighborhood directed business center. Therefore, the ownership is seeking rezoning from the City of Goodyear. This requires that the existing PAD be amended to change the use from TH-Townhomes to C-2 General Commercial, with a use permit for a self-storage facility and restrictions allowing for certain neighborhood retail uses. PROJECT OVERVIEW The Landowners are proposing to split the parcel into two lots; (Parcel 1) a 4.6 acre single story selfstorage facility and (Parcel 2) a 3.2 acre, 26,000 square foot low density neighborhood retail center. The parcels will be developed independently as follows: SELF STORAGE PHASE I buildings A-D: The self-storage facility would be constructed in two phases, with the first phase offering approximately 56,000 square feet of indoor, air-cooled storage space, along with several outdoor RV parking spaces on the area of the storage parcel where future buildings will be constructed. Construction is expected to commence within eighteen to twenty-four months.. The project will include an on-site manager with residence, as well as office space for the operation of the facility. The development will have an attractive facade on all four sides, consistent with the residential feel of the surrounding neighborhood which minimizes its impact on the area. Renderings provided, and an additional elevation depicting the rear of Building A presents this attractive façade. During this phase, and prior to construction of additional phases, the remaining land [retail area] would be treated with ABC for dust control, or paved [Storage Facility unused land] for RV/Boat storage. However, we will construct the landscape buffer for the entire project, including the retail land, in Phase I. SELF STORAGE PHASE II buildings E-H: The second phase of the project involves adding additional storage facilities to the area designated for those buildings [where RV spaces are depicted in Phase I] and would be constructed when demand for storage space warrants additional units. RETAIL CENTER PHASE III -- buildings I & J: The neighborhood retail center would be developed independently of the storage facility, and most likely at a later date as market factors determine viability for new retail space. The concept for this center is to develop it at a cost which allows for rents that are lower than other centers in the area that have major street frontage. These lower rents would target businesses that may not have a

3 need for major exposure, but want to operate in the area and can do so with affordable rents. The target tenants would provide services that complement the neighborhood and the residences surrounding it. Some examples of businesses are: Medical, physical therapy facility or dental offices Insurance, real estate, tax and other professional services, Kids play gym or daycare facility Church or other meeting facilities (subject to separate special use permit approval) Tailor, cleaners, salon or other personal services Delivery services This center will operate during normal business hours [7 a.m. to 7 p.m.] and will be constructed to provide an attractive look along the street frontage, focusing on keeping the residential feel of the neighborhood. The project will be developed to minimize impact to surrounding neighborhoods from light, noise and traffic. Whether the Self Storage Phase II or the Retail Center Phase III begins construction first will depend upon market demand for the product offered by each. ZONING REQUEST The Landowners are requesting that the existing PAD be amended to change the use from TH- Townhomes to C-2 General Commercial, with a use permit for a self-storage facility and restrictions allowing for certain neighborhood retail uses. Specific Property Use: That portion of the property within the area of the site plan designated for ministorage would be used for a mini-storage facility. The remaining portion of the Property would be used for a neighborhood commercial center limited to the following business types: Offices for professional, administrative, clerical and sales services Medical offices or clinics Medical laboratories, excluding animal research Veterinary offices provided that such facilities are constructed to prevent objectionable noises and odors outside the walls of the office. Boarding of animals shall be permitted only for short time periods for the purpose of observation incidental to care Day care for elderly or youth Studios for the practice or sale of fine art Personal and household services, such as barber and hair styling shops, beauty salons, clothing alterations, dry cleaning shops, furniture and appliance repair, copying and printing shops, selfservice laundry, shoe repair shops but excluding all drive through window facilities Retail stores with sales only, not exceeding 4,000 square feet total of gross floor area per store, all such businesses not to exceed 50% of the total gross floor area of this portion of the development Key and lock shops Restaurant, excluding drive-in or drive thru, with the area devoted primarily to the consumption of alcoholic beverages not to exceed 25% of the total public floor area.

4 Possible church use [requiring an additional special use permit and approval through Citizen Review] DRAWBACKS OF EXISTING LAND USE UNDER CURRENT ZONING At the time the PAD overlay was adopted for the larger development, this parcel was intended to provide additional housing while acting as a transition from single family residential to commercial. However, planning for this small parcel to develop as townhomes occurred during a time of abnormal growth in the area and in Arizona in general. Suffice it to say that growth was over-anticipated and has left many residential communities with a large surplus of both lots and homes. This area is no exception, as a partially completed development immediately adjacent to the south of the subject parcel has reverted back to the lender, and has subsequently sold to investors. Although the prognosis for this area still remains positive and the general feeling is that the current inventory will be absorbed in the future, it has certainly changed the scope of whether additional residential units are viable for the area. Additionally, the downward push in residential pricing over the past three years has made development of residential units on this parcel, with its current density, not financially viable. Prior to acquisition of the parcel, as a part of their due diligence and feasibility study, the previous owners had a site planner design plans for a townhome community on the parcel.. Attached are exhibits showing two potential layouts for a Townhome project. One shows 99 units, with several units located on a sliver parcel across the new street alignment [158th Ave.]. The other shows a 95 unit project using the parcel across the street for retention. There are several issues with these plans, most notably is the parcel shown across the street as part of this project no longer exists. Therefore, it is correct to assume that any townhome project would yield less than the amount of dwelling units shown on these plans. Based on this information, as well as their own feasibility analysis, the previous owners concluded that the project was not feasible and decided to sell the land to be developed for a different use. TOWNHOME USE PROGNOSIS NOT FEASIBLE In the past six months,, there have been 21 townhome sales within a five [5] mile radius. The average unit size was 1,400 square feet and the average sale price was approximately $68 per square foot. From this information, even assuming a new unit would carry a premium over this market price of approximately ten percent [10%], new units brought to market would sell for approximately $75 per square foot in a best case scenario for the next year or two. After that period of time, one might expect a return to more typical growth averaging three percent [3%] per year. A simple financial analysis which does not include the cost to purchase the land, but includes all of the other costs of development, demonstrates that a townhome development is not currently financially feasible and would not be feasible for a significant period of time.

5 LAND COSTS [NOT INCLUDED] $0 LAND IMPROVEMENTS [$250K PER ACRE] $1,960,000 PLANS, PERMITS & HOOKUP FEES $250,000 CONSTRUCTION [$85 PSF/1500SF/UNIT] $10,200,000 SUB TOTAL COSTS $12,410,000 CLOSING COSTS & COMMISSIONS [10%] $1,378,889 DEBT SERVICE [I/O 24 8%] $1,945,600 TOTAL COSTS WITHOUT LAND $15,734,489 COST PER UNIT [80 UNITS] $196,681 COST PER SF $ INCREASE FROM CURRENT MARKET OF $75/SF 74.8% YEARS TO REACH PRICE POINT [3% GROWTH] 24.9 * COST ESTIMATES PROVIDED BY CAMPBELL DEVELOPMENT, AZ ROC This simple analysis suggests that this parcel, will sit undeveloped for a significant amount of time under its current zoning and density. Current ownership is not averse to developing townhomes on this site if financially prudent to do so. However, in our opinion the residential market price for townhomes will not exceed the cost to develop townhomes on this parcel for at least the next TWO DECADES, if not longer. The analysis demonstrates that townhome use is not feasible even if you gave the land away for nothing. Taking this analysis into consideration, development of even high density multi-family residential units may not prove financially feasible for this small parcel of land. Moreover, it is our understanding that high density multi-family use would not be supported by the neighborhood and could strain existing City infrastructure because of the increased demand for services and traffic flow in the area. EXISTING VERSUS PROPOSED ZONING Considering the current zoning and the need for any developer to have at least the potential for financial return, townhomes may not be built on this parcel for a period that could be as long as thirty [30] years. It is prudent for the neighborhood and the City as well as the land owner to look for alternative uses that could fit the needs of the neighborhood, the land owner and the City. Zoning with restricted use Changing the parcel s zoning to C-2 without any stipulations may bring significant opposition from the neighbors and may not be in accordance with good land use planning practices since general commercial uses in the area could be excessive, something which the City of Goodyear does not prefer. Accordingly, the current land owners are proposing a zoning change limited to specific uses shown in our concept which we believe are complimentary to the neighborhood and in keeping with good neighborhood planning practices. This would allow for a development that benefits the neighborhood, but limits what can be built without neighborhood and City approval, so that no future owner can develop the parcel for any uses that may not fit the criteria for which it is currently intended by the neighborhood or the City of Goodyear. Reduction in Use of City Services With the specific restrictions of use, this proposed zoning will significantly decrease the ongoing load on existing services such as power, water, sewer, trash and traffic.

6 Power: Use of power for self-storage, and a small neighborhood retail center [approximately 25,000 square feet] is anticipated to be significantly reduced compared to an 80 Unit townhome project. Water, Sewer and Trash: An 80 unit project would contain upwards of 160 or more bathrooms, as well as dishwashers, clothes washers, landscaping and other general residential water uses. Additionally, this type of use would generate a significant amount of refuse. Compare this to a project that would equate to a dozen or less bathrooms [storage and retail] and few other appliances. The proposed development would dramatically reduce use of services and infrastructure for water, sewer and trash. Traffic Flow: The number of cars leaving and entering an 80 unit townhouse development will be significantly more than the anticipated number of cars leaving and entering the combined development of mini-storage and the small neighborhood commercial center. The services of Kimley-Horn and Associates, Inc. were engaged to perform an analysis on the potential impact of traffic on the intersection of 158th Avenue and Roosevelt Street. It is their conclusion that impact of the proposed development would not be significant enough to warrant any change in the traffic flow at the intersection of 158th Avenue and Roosevelt Street. [See opinion letter dated May 3, 2010 which is attached.] Moreover, it is expected that actual traffic would be decreased from a townhome project to this specific use, even to essentially zero after business hours and on weekends Additionally, this particular use will bring significantly more revenue to the City of Goodyear from sales tax as opposed to development taxes only. We believe that a change in zoning to allow for this project would be its highest and best use. Our proposal is to change the zoning to allow for the use of both Self-Storage and for lower density neighborhood commercial, which would provide an appealing buffer between the high density commercial properties and the residential properties in the neighborhood. IMPACT OF CHANGE IN ZONING The proposed self-storage facility and neighborhood commercial center will serve both homeowners and commercial businesses in the immediate area for their storage needs, as well as commercial space for small businesses providing neighborhood services. Due to the number of homes and businesses in the area, and the lack of sufficient supply of storage units, this project fits a particular need for the area now and even more in the future as home sites continue to be built out. A study conducted by DUX Advisory Group showed an immediate demand for self-storage space within a three [3] mile radius of the subject parcel to be approximately 55,000 square feet of indoor storage, with a projected demand of 150,000 by Our proposed project would satisfy current demand now and in the future. The proposed use change will bring a positive impact to the community and is a better planned land use than medium high density residential. The proposed development benefits the neighborhood by providing conveniently located storage space for families living nearby. Today s reality of smaller and smaller homes and lots coupled with our consumer oriented society produces a fundamental need for many families for extra storage in an offsite storage facility. A neighborhood facility is convenient and serves that need. In a similar manner, neighborhood commercial centers will become increasingly popular as the cost of transportation continues to increase and the cost to operate in high rent retail locations become more

7 difficult. Businesses that do not have a need for major street frontage, but require space within a close reach of neighborhoods in the area will look to a smaller development that can offer leases at a reduced rent from premium high-density retail locations. This center will not compete with the commercial properties immediately adjacent to it, but will complement them by offering different businesses [that cannot afford rent in those centers] the opportunity to operate their business in close proximity to this vibrant community. RELATIONSHIP TO ADJACENT DEVELOPMENTS Below is an aerial map of the immediate area with the subject parcel [ A ] highlighted in yellow, as well as surrounding properties B-G and a description of each: A B Subject Property Lies West of Estrella Boulevard and is bounded by 158 th Avenue to the West, Roosevelt Street to the North, Commercial use property to the East and single-family home lots to the South Single-Family Residential Northwest across Roosevelt Street is a community of single-family homes, buffered by a community park/retention basin which fronts the entire span of the subject parcel s frontage along Roosevelt. 158th Avenue is one of two entry points to this community. The community is bounded by I-10 Freeway to the North, a commercial corner to the West, a Wal-Mart [ C ] to the East, and a gravel pit to the South [ G ] [along with our parcel].

8 C D E F Commercial Directly Northeast across Roosevelt Street is a Wal-Mart [ C ]. This parcel is bounded by the residential community [ B ] on the West, I-10 Freeway to the North, Estella Parkway to the East and Commercial Parcels to the South [ D ]. Commercial Immediately adjacent to the parcel to the east is a mixed-use commercial development called Parkway Village [ D ] encompassing high density retail, a hotel and two two-story office buildings. Commercial This commercially zoned parcel encompasses office condominiums and a Safeway. It lies to the East and South of the subject parcel, adjacent to the residential lots [ F ] to the subject s south. It is bounded by Estrella Parkway to the East, parcel D to the North, Van Buren to the South. Single-Family Residential Immediately adjacent to the subject parcel to the South is an incomplete residential development [Brown Communities] [ F ] containing house lots which have reverted to the bank. This residential community also lies adjacent to the commercial development described above [ D ] as well as adjacent to the commercially zoned properties to the East [ E ]. Directly West across 158th Avenue is a deep gravel pit [ G ] encompassing approximately thirty acres. It fronts Van Buren to the South.

1. Multi-family dwellings, including town homes, apartments, or condominiums.

1. Multi-family dwellings, including town homes, apartments, or condominiums. Sec. 4-6.67 Planned Unit Development (PUD-M). a. Definition. A planned multi-family zoning district of three acres or more, consisting of townhouses, apartments, condominiums, single-family detached, single-family