Achen-Gardner, Inc. v. Superior Court

809 P.2d 961, 167 Ariz. 536
CourtCourt of Appeals of Arizona
DecidedMay 7, 1991
Docket1 CA-SA 90-089
StatusPublished
Cited by4 cases

This text of 809 P.2d 961 (Achen-Gardner, Inc. v. Superior Court) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Achen-Gardner, Inc. v. Superior Court, 809 P.2d 961, 167 Ariz. 536 (Ark. Ct. App. 1991).

Opinion

OPINION

TAYLOR, Presiding Judge.

Achen-Gardner, Inc., (Achen-Gardner) brought this special action against the Superior Court, in and for Maricopa County, and real parties in interest the City of Chandler (Chandler) and Jeri-Co Group, Inc. (Jeri-Co). Achen-Gardner asks this court to consider whether the public street improvement project undertaken by Chandler and Jeri-Co, through a development agreement under the provisions of A.R.S. § 9-500.05, is subject to Arizona’s competitive bidding statutes, A.R.S. §§ 34-201 to -226. We have jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution, A.R.S. § 12-2101 B; and Rule 8, Arizona Rules of Procedure for Special Actions. See Big D Constr. Corp. v. Court of Appeals, 163 Ariz. 560, 789 P.2d 1061 (1990). On July 13, 1990, we entered our order to the Superior Court to comply with the directives set forth in our conclusion in this opinion.

I. FACTS AND PROCEDURAL HISTORY

In 1988, the Arizona Legislature enacted A.R.S. § 9-500.05, which provides in pertinent part as follows:

A. A municipality, by resolution or ordinance, may enter into development agreements relating to property in the municipality____
F. In this section, unless the context otherwise requires:
1. “Development agreement” means an agreement between a municipality and ... a landowner or any other person having an interest in real property that may specify or otherwise relate to any of the following:
(g) Conditions, terms, restrictions and requirements for public infrastructure and the financing of public infrastructure and subsequent reimbursements over time.

The purpose of this legislation is to permit the expeditious construction of needed or desired public improvements in order to facilitate a proposed private development. The initial capital outlay for the costs of the public improvements is provided by the *538 developer who is assured of reimbursement by the municipality pursuant to an agreed upon repayment schedule. This procedure permits the developer to have the public improvements ready for use when the development is opened to the public; permits the municipality to avoid the risk of performing improvements for a project that might not materialize; and further permits it to factor repayment into the municipal budget over a period of time, and upon such contingencies as the parties may specify.

In June 1989, Chandler entered into a development agreement pursuant to A.R.S. § 9-500.05 with D.W.C. Commercial Properties (D.W.C.) to develop the Sun-Tech Center, a retail commercial development located on the northeast corner of Alma School and Warner Roads. The agreement required the developer to modify certain existing public streets as off-site improvements necessary for the private development of the site. In return, Chandler was to reimburse the developer for the full cost of these off-site improvements from a portion of the sales taxes collected from the development’s retail tenants. The agreement also provided that “Developer awards contract to lowest reasonable bidder; if for some reason Developer rejects bid, then Developer pays the difference between lowest bid and bid selected.” This agreement was recorded in the Maricopa County recorder’s office on June 15, 1989. D.W.C. subsequently assigned its rights and obligations under the development agreement to Jeri-Co.

In November 1989, Achen-Gardner received the “Notice of Call for Bids” for the Sun-Tech Center’s off-site improvements on Chandler city letterhead, designating Chandler and Jeri-Co/Walmart Stores, Inc., as “Joint Developers.” Interested contractors were invited to submit bids to the Chandler purchasing office, where a pre-bid conference was also held, at which Chandler officials described the development agreement and informed bidders that Jeri-Co, not Chandler, would award the street improvement contract.

Achen-Gardner submitted a timely bid proposal ($394,553.87) and bid bond to Chandler officials. On December 18, 1989, after publicly opening the bids, Chandler officials announced that Achen-Gardner was the lowest bidder by almost $31,000. On December 21, the Chandler city engineer sent a letter to Jeri-Co recommending that they award the project contract to Achen-Gardner as the lowest bidder, and stated that Chandler would reimburse Jeri-Co only up to the $394,553.87 amount.

Early in January 1990, Achen-Gardner contacted Jeri-Co and identified itself as the low bidder and requested a meeting to discuss the street project. Jeri-Co informed Achen-Gardner that the decision to award the contract had not been made. Achen-Gardner later learned that Jeri-Co would not award it the contract and instead would perform the street improvements themselves, even though Jeri-Co had not submitted a bid. 1

Achen-Gardner then requested Chandler’s help in awarding the contract, but a representative of Chandler told Achen-Gardner that, under the development agreement, Chandler was powerless to award the contract. Achen-Gardner thereafter met with the Chandler city attorney, who told Achen-Gardner that the Chandler city council would recommend to Jeri-Co that it award the street improvement contract to Achen-Gardner. Jeri-Co, however, refused. Consequently on February 1, 1990, counsel for Achen-Gardner sent a demand letter to Chandler’s mayor and city attorney, Jeri-Co, and D.W.C., demanding that Chandler and Jeri-Co award the contract to Achen-Gardner immediately. Jeri-Co again refused.

On April 6, 1990, Achen-Gardner filed a special action in superior court, claiming that Chandler’s development agreement violated Arizona’s competitive bidding laws, and seeking an order (1) enjoining the actions of Chandler and Jeri-Co, and (2) awarding the street improvement contract *539 to Achen-Gardner. After a hearing, respondent trial judge granted Chandler’s and Jeri-Co’s motions for directed verdict and denied Achen-Gardner’s requested relief, concluding that Achen-Gardner had constructive notice that Jeri-Co and not Chandler would award the contract, that ... “No reason has been shown as to why the developer must comply with the competitive bidding statutes in awarding the contract,” and that ... “The City and the public are protected by the bidding procedures used because reimbursement is limited to the amount of the low bid.” Achen-Gardner filed a petition for special action, asking, inter alia, that this court review whether development agreements pursuant to A.R.S. § 9-500.05

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Bluebook (online)
809 P.2d 961, 167 Ariz. 536, Counsel Stack Legal Research, https://law.counselstack.com/opinion/achen-gardner-inc-v-superior-court-arizctapp-1991.