Kyrene Schools’ governing board is studying the possible sale or other profitable use of two large tracts of land that include the Tempe site of the district headquarters and a much larger tract in Ahwatukee along the I-10 corridor.
Former longtime Kyrene board member Ross Robb, who owns a real estate investment firm, gave a presentation last week on options the district could consider for disposing of the land.
“I am not here for any compensation. This is pure volunteerism and whether it goes anywhere is up to you,” said Robb, who as a board member had suggested that the district seriously consider doing something with the land in an effort to address its precarious long-range financial picture.
The tracts in question are the 19-acre district headquarters site at Kyrene and Warner roads in Tempe and an empty 28-acre parcel on the west side of I-10 in the vicinity of 50th Street and Chandler Boulevard in Ahwatukee.
The board seven years ago won permission from voters to dispose of the land and has three years left to do something or else it would have to hold another referendum.
Kyrene’s study means that both public school districts serving Ahwatukee are now exploring options to make millions off land they have owned for years.
Tempe Union High School District is exploring the sale of a 63-acre site in Ahwatukee at Desert Foothills Parkway and Frye Road and some disposition of a 49-acre parcel at Kyrene Road and the Loop 202 Santan Freeway in Chandler.
The two districts could realize millions of dollars in new revenue from the disposition of the tracts, depending on what option they select. Those options range from an outright sale to some kind of long-term partnership with a developer.
And all four sites have been eyed by developers for years for various reasons, particularly their prime locations.
In Kyrene’s case, the disposition of the headquarters site poses some additional issues because it hosts more than just district personnel. It also is home to Kyrene’s fleet of school buses as well as the its food-service operation and print shop.
Admitting “this is a much more complicated piece of property because you need a place to fix buses, make lunches and so on,” Robb nonetheless said, “One would argue this is an underutilized piece of property.”
Kyrene Superintendent Jan Vesely and board members stressed that district officials are probably months away from any final decision on either parcel.
At the May 9 meeting, Robb walked the board through various options for disposing of the two parcels, noting, “The first thing you want to have is a land plan.”
“You have to start with ‘What is your goal?’ Is it just revenue? Is it usage? Does the district want to put things on this property?’”
Recalling the board’s sale of an 11-acre parcel in Club West, Robb reminded the board that the simplest disposition – though not necessarily the most advantageous long-term – is to sell it. “If you spend it like Club West, it’s gone,” he said of the proceeds.
Ground leases or other options, he added, could result in “more money over a long period of time.”
Robb and the board also acknowledged that any option has pro, cons and some complications. And they agreed that they would want to engage citizens in the decision-making process.
“Given the combined value of these properties, you’re talking tens of millions of dollars,” Robb said. “You’re going to want to do it right.”
But Robb also noted that disposing of publicly owned “land that doesn’t provide any revenue” and selling or leasing it “is something a lot of universities are doing” and that “a lot of cities are doing this.”
The district site could provide a possible hybrid of school-private uses, Robb said.
Both tracts also could be leased – which “would require a greater number of consultants” to hammer out a deal, including an appraiser, a transaction attorney and other professionals.
“There are lots of complexities in a ground lease,” Robb said. “It’s slightly riskier than a sale because you are relying on someone to make a payment year after year after year … but it could be very advantageous as opposed to a sale.”
Board member Michael Myrick asked about a swap of one property for another.
“It could be almost anything,” Robb replied. “The private sector is resourceful in telling you what is possible. To whatever extent you don’t put them in the box, it will work. Just let them use their own creativity.”
But Myrick also noted that any developer interested in either site would want to do an environmental study because the district site could be contaminated by oil and gasoline from school buses and because no one knows what, if anything, was ever on the Ahwatukee site.
When asked about adverse neighborhood reaction to some possible uses of either site, Robb told the board, “I think your motivation is likely to be less philanthropic. I think you probably need the revenue more than positive publicity.”
While her colleagues conceded, they had much to consider before making a final decision on either tract, board member Bernadette Coggins suggested the Ahwatukee tract may offer a chance to move more quickly – especially in light of Kyrene’s fiscal struggles.
“I do absolutely agree that with the I-10 tract, we have to consider it’s a healthy market right now,” she said. “And I think we do have a responsibility to the taxpayers of Kyrene.”