ARIZONA BOARD OF REGENTS 2020 N. Central Avenue, Ste. 230 Phoenix, Arizona. Friday, March 4, :00 a.m. 12:00 p.m.

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1 ARIZONA BOARD OF REGENTS 2020 N. Central Avenue, Ste. 230 Phoenix, Arizona Friday, 10:00 a.m. 12:00 p.m. 10:00 a.m. CALL TO ORDER, GREETINGS AND ANNOUNCEMENTS FROM THE CHAIR 10:05 a.m. EXECUTIVE SESSION Pursuant to A.R.S , the board will convene in executive session to discuss items identified on the executive session agenda. Statutory Authorization A.R.S Items to be Discussed (A.3, 4, 7) 1. Legal advice and discussion regarding the ASU Athletics Facilities District. 10:40 a.m. RESUME PUBLIC SESSION 1. Approval of Ground Leases and Related Agreements for Development of the ASU Athletic Facilities District (ASU) Arizona State University asks the board for authorization to enter into ground leases and related agreements for the development, occupancy, and operation of parcels of land within the ASU Athletic Facilities District (the District ). 11:00 a.m. 2. Report on Legislative Affairs Kody Kelleher will report on current legislative affairs. The board office also asks the board to take a position on legislation affecting the university system.

2 ARIZONA BOARD OF REGENTS MEETING 2 12:00 p.m. ADJOURN PLEASE NOTE: This agenda may be amended at any time prior to 24 hours before the board meeting. Estimated starting times for the agenda items are indicated; however, discussions may commence, or action may be taken, before or after the suggested times. Any item on the agenda may be considered at any time out of order at the discretion of the board chair. The board may discuss, consider, or take action regarding any item on the agenda. During the meeting, the board may convene in executive session pursuant to A.R.S (A)(3) for legal advice regarding any item on the agenda.

3 Arizona Board of Regents Meeting Item #1 EXECUTIVE SUMMARY Page 1 of 7 Item Name: Approval of Ground Leases and Related Agreements for Development of the ASU Athletic Facilities District (ASU) Action Item Committee Recommendation to Full Board First Read of Proposed Policy Change Information or Discussion Item Issue: Arizona State University asks the board for authorization to enter into ground leases and related agreements for the development, occupancy, and operation of parcels of land within the ASU Athletic Facilities District (the District ). Enterprise or University Strategic Plan Empower Student Success and Learning Advance Educational Attainment within Arizona Create New Knowledge Impact Arizona Compliance Real property purchase/sale/lease Other: Statutory/Policy Requirements ABOR Policy A.1.a requires board approval for any lease with a term that exceeds 120 months. Background In 2010, the Arizona Legislature passed HB 2676, which enabled the establishment of a single university athletic facilities district in each county that is home to a state university. The purpose of the legislation is to permit state universities to generate revenue to construct and improve intercollegiate athletic facilities through the assessment of an in-lieu payment in conjunction with commercial development of University-owned property. The District is an approximately 330-acre property located at the northeast end of the Tempe campus, generally bounded by Sun Devil Stadium, Veterans Way, University Drive, McClintock Road and Tempe Town Lake. In addition to proximity to the Tempe Contact: Morgan R. Olsen, Executive Vice President, Treasurer and CFO (480) Morgan.R.Olsen@asu.edu

4 Board of Regents Meeting Item #1 EXECUTIVE SUMMARY Page 2 of 7 campus and the research, instruction, and collaboration opportunities this provides, the District is close to light rail, major freeways, Sky Harbor Airport, Tempe Town Lake and vibrant downtown Tempe. Intergovernmental agreements among ASU, Maricopa County and the District's legal entity define management and operations of the District, which through its sevenmember Board is responsible for assessing and collecting District in-lieu payments. District assessments cannot exceed applicable property tax rates set by Maricopa County. In addition to financial support for intercollegiate athletics, the District will provide significant, tangible economic, social and cultural benefits to the University and the community. While the District Board is responsible for managing in-lieu payment revenue within the District, ASU retains ownership of the property within the District and is responsible for planning and development within the District. After a Request for Qualifications and an extended vetting process, ASU selected Catellus Development Corporation (Catellus) in October ASU and Catellus entered into a twelve-month Exclusive Negotiating Agreement to support initial planning activities within the District, including terms of a master development agreement. During the Exclusive Negotiating Agreement period, Catellus and ASU have developed a long-term development plan that includes a conceptual land use master plan, market study, infrastructure master plan, phasing schedule and marketing plan. Major components of the District are anticipated to include commercial office, multifamily residential, hospitality and service retail development. The preliminary master development plan is shown in Exhibit B. ASU and Catellus will execute a long-term Development Agreement designating Catellus as the master developer for the District. This long-term agreement will require Catellus to invest in the infrastructure, site work and marketing to execute the master development plan successfully. Discussion Development Process: The planning horizon for development of the District is anticipated to be twenty-plus years. ASU and Catellus will be actively engaged in creating interest in the District, soliciting appropriate District tenants, and negotiating long-term ground leases to realize the full potential of the District.

5 Board of Regents Meeting Item #1 EXECUTIVE SUMMARY Page 3 of 7 The master development plan may evolve with market trends and conditions. Material changes to the master development plan will be submitted to ABOR for approval. Material changes will include the proposed addition of any land use not reflected in the master development plan in effect at the time of such proposed change or a substantial change in the mix or distribution of land uses reflected in the master development plan in effect at the time of such proposed change. ASU will notify the Business and Finance Committee chair and the ABOR office when it approves takedown notices from Catellus and will provide a report detailing the contemplated development. Executed ground leases will be for projects consistent with the master development plan and will be consistent with the parameters set forth in Exhibit C. Lessees will be responsible for development costs, operating and maintenance costs, assessments, taxes, and other costs associated with development of vertical improvements within the District. Development of the District will require negotiation of complex, market-driven transactions with speed and flexibility to be responsive to the marketplace of prospective tenants. To justify the investment from Catellus, provide confidence to the marketplace that Catellus has the authority and ability to deliver building sites and to provide the flexibility needed to respond to current market conditions and opportunities, ASU is requesting approval to execute ground leases within the District for the sole purpose of prime commercial and residential development. Without this flexibility, ASU will be competitively disadvantaged relative to other commercial and residential developments in the vicinity. ASU and Catellus will negotiate ground lease terms for development within the District, subject to approval of the ASU President and Executive Vice President, Treasurer and Chief Financial Officer. Reporting: ASU will annually provide a report to ABOR on project status, lease and tenant activities, and financial information including in-lieu revenues and allocations. Fiscal Impact and Management Plan ASU will use funds generated from leasing activity within the District to offset relocation costs of the existing athletics and other facilities within the designated area of the District, to construct required infrastructure within the District, and to construct and improve the University's intercollegiate athletics facilities.

6 Board of Regents Meeting Item #1 EXECUTIVE SUMMARY Page 4 of 7 Exhibits Exhibit A Athletic Facilities District Location Map Exhibit B Preliminary Master Development Plan Exhibit C Ground Lease Parameters Requested Action Arizona State University asks the board to authorize the ASU President, the ASU Executive Vice President, Treasurer and Chief Financial Officer, and the ASU Assistant Vice President for University Real Estate Development, or any successor titles to such positions, each separately, to take all appropriate actions to execute ground leases within the ASU Athletic Facilities District, as described in this executive summary.

7 Board of Regents Meeting Item #1 EXECUTIVE SUMMARY Page 5 of 7 EXHIBIT A LOCATION MAP Boundary Map of ASU Athletic Facilities District (Maricopa County, Arizona)

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9 Board of Regents Meeting Item #1 EXECUTIVE SUMMARY Page 6 of 7 EXHIBIT B Preliminary Master Development Plan

10 Board of Regents Meeting Item #1 EXECUTIVE SUMMARY Page 7 of 7 EXHIBIT C ASU Athletic Facilities District Ground Lease Parameters Valuation In Lieu Assessments Term Form Ground leases shall be issued for fair market valuation (exceptions would require ABOR approval). In lieu assessments shall be collected on all ground leases in accordance with the statutory framework establishing the Athletic Facilities District (exceptions would require ABOR approval). Ground leases shall be issued for an initial term of no more than 99 years (exceptions would require ABOR approval). The standard form of ground lease shall be reviewed and approved by ABOR General Counsel.

11 Board of Regents Meeting Item #2 EXECUTIVE SUMMARY Page 1 of 1 Item Name: Report on Legislative Affairs and Board Adoption of Position on Legislation Action Item Committee Recommendation to Full Board First Read of Proposed Policy Change Information or Discussion Item Issue: Kody Kelleher will report on current legislative affairs. The board office also asks the board to take a position on legislation affecting the university system. Enterprise or University Strategic Plan (Check the element(s) of the strategic plan that this item supports or advances) Empower Student Success and Learning Advance Educational Attainment within Arizona Create New Knowledge Impact Arizona Compliance Real property purchase/sale/lease Other: Governance Requested Action The board office asks the board to take a position on legislation affecting the university system. Contact Information: Kody Kelleher, Director for Government Affairs, ABOR kody.kelleher@azregents.edu

12 Arizona Board of Regents Special Board Meeting at 10:00AM Handout on Legislation Affecting the University Enterprise Bills the board office recommends for opposition HB 2436 regents; designees (Representative Stevens) HB 2436 originally authorized the governor and Superintendent of Public Instruction to authorize a designee to serve in their stead on ABOR. The governor s designee was removed from the bill in the Rules Committee. The bill passed out of the House and has not been assigned to a Senate committee. The board has not taken a position on the bill. HB 2479 ABOR; terms (Representative Petersen) HB 2479 shortens the length of regent terms from 8 years to 4 years, but allows regents who are serving at the effective date of the bill to serve out the remainder of their term. The bill passed out of the House and has not been assigned to a Senate committee. The board has not taken a position on the bill. SB 1389 student, teacher data collection; prohibitions (Senator Burges) SB 1389 adds several new requirements and prohibitions regarding student data privacy. Specifically, the bill provides new regulations regarding written consent, sharing collecting and reporting of data, third-party agreements, public notification of data uses, penalties for violations and policies for interaction with the federal government. The bill passed out of the Senate Education Committee but has not been heard in Senate Rules. The board has not taken a position on the bill. REGENTS Chair Jay Heiler, Paradise Valley Greg Patterson, Scottsdale Ram Krishna, Yuma LuAnn H. Leonard, Polacca Rick Myers, Tucson Larry Penley, Phoenix Bill Ridenour, Paradise Valley Ron Shoopman, Tucson STUDENT REGENTS: Mark Naufel, ASU Jared Gorshe, NAU EX-OFFICIO: Governor Doug Ducey Superintendent of Public Instruction Diane Douglas ENTERPRISE EXECUTIVE COMMITTEE Eileen I. Klein, Board President Michael M. Crow, ASU President Rita Cheng, NAU President Ann Weaver Hart, UA President

13 Bills the board office recommends for discussion and potential opposition HB 2548 postsecondary campuses; public forums; activities (Representative Boyer) HB 2548 originally rewrote the section of state law protecting students right to speak in a public forum and provided a process for the Attorney General (AG) or a student to file suit in state court for a violation of the new law. A strike-everything amendment was added to the bill in the House Education Committee removing most of the new language. A few smaller changes to the definition of public forum were included, as was a modified penalty process where the AG or person whose expressive rights were violated can file suit in state court and potentially be awarded $500, plus $50 for each day the violation remains ongoing, reasonable court costs and attorney fees. A floor amendment was added that replaced the specific dollar amount penalties with injunctive relief. However, discussion of the bill at a previous board meeting indicated the U.S. Constitution, Arizona Constitution and current state law is sufficient for protection of free speech on campus. The bill passed out of the House The board opposed the underlying bill based on the U.S. Constitution, Arizona Constitution and current state law being sufficient for protection of free speech on campus. The board has not taken action on the bill as amended. HB 2615 campuses; free speech zone; prohibition (Representative Kern) HB 2615 as introduced prohibited universities and community colleges from designating any portion of campus as a free speech zone and required any such free speech zones to be converted into a memorial. Rep. Kern amended the bill on the House floor by eliminating the memorial requirement and to consist of only the following new requirement: Subject to reasonable time, place and manner restrictions, a community college or university may not limit any area on campus where free speech may be exercised. The bill passed out of the House The board opposed the underlying bill based on the same arguments as HB 2548, but has not taken a position on the bill as amended. Kody Kelleher, Director, Government Affairs Kody.Kelleher@azregents.edu

14 HB 2338 educational institutions; firearms; rights-of-way (Representative Townsend) HB 2338 originally prohibited an educational institution from prohibiting a person from lawfully possessing or carrying in their means of transportation a concealed weapon on a public right-ofway. Public right-of-way was defined as: Any highway, street, road, thoroughfare, path, alley or other right-of-way that is publicly accessible and that is established by a governmental entity. The bill was amended on the House floor to: Change the last part of the public right-of-way definition to read or other right-of-way that is publicly accessible and that is established and maintained by this state or a political subdivision of this state. ; Exclude property of an educational institution from being a public right-of-way; and Replace concealed weapon with deadly weapon. The bill passed out of the House and has not been assigned to a Senate committee. The board opposed the underlying bill. SB 1418 state museum; fees; rulemaking (Majority Whip Griffin) SB 1418 requires proposed fees for archaeological discoveries and preservation efforts performed by the State Museum, located at the University of Arizona, to be approved through the Governor s Regulatory Review Council. The bill passed out of the Senate 30-0 and the board has not taken a position on the bill. HB 2307 anatomical gifts; procurement organizations; licensure (Representative Cobb) HB 2307 adds new regulations for certain anatomical procurement organizations, including organ procurement organizations, tissue or eye banks, and human body or human body parts storage facilities. Included in the new regulations is a requirement that such anatomical procurement organizations be licensed by the Arizona Department of Health Services. The bill may affect the University of Arizona Medical School. The bill passed out of the house and the board has not taken a position on the bill. Requested Action This board office asks the board to adopt official positions on certain legislation. Kody Kelleher, Director, Government Affairs Kody.Kelleher@azregents.edu