After spiriting bidding among four homebuilders, an affiliate of Blandford Homes won the auction of 373 acres of State Trust Land in Ahwatukee with a bid of $175.5 million– 67 percent above the appraised value of $105 million.
Reserve 100 LLC, which is based at the Gilbert headquarters for Blandford Homes, beat out three competitors in the June 7 State Land Department auction of the parcel along Chandler Boulevard between 19th and 27th avenues.
State Corporation Commission records for Reserve 100 list Jeff Blandford, president of Blandford Homes, as a principal in the company.
The auction did not disappoint the Land Department’s expectations for the property. Mark Edelman, the Land Department’s director of planning and engineering, told the Village Planning Committee in December 2019, “We have had a great deal of interest in this parcel from different parties, mostly home builders.”
And small wonder why: the appraisal estimated that as many as 1,050 homes can be built on the land – which is already zoned for residential development. There also are small pieces of the land in the southeast corner that are zoned for apartments or condos and some retail.
Evidencing the high interest in a prime piece of real estate was the fact that there were 328 bids made by the four participants before Blandford came out on top.
Ironically, this is the second consecutive bidding situation where some Ahwatukee land went to Blandford.
The last parcel in Ahwatukee to be put up for bidding – though not in a live auction like the Trust Land parcel was – comprised 63 acrestthat Tempe Union High School District owned at Frye Road and Desert Foothills Parkway.
Blandford paid $23 million for that parcel – well over the $12 million to $15 million that the district’s consultant felt it would sell for.
Today, that parcel is home to the gated Palma Brisa community, where 197 homes ranging in size between 1,700 and 4,000 square feet are priced between $491,000 and $727,000.
In winning the auction, Blandford bested Pulte Homes, DR Horton and First American Trust.
While Pulte and Horton – like Blandford – are two of Arizona’s most prominent homebuilders, First American Trust is an investment management and commercial banking firm.
Likely three factors fueled the intense bidding: the critically low inventory of homes for sale, particularly close to the core of the Phoenix Metro region; the parcel’s ideal location in a high-quality community abutting the South Mountain Freeway; and the zoning is already in place.
The auction also gave a shot in the arm for public education in Arizona. All the money from the sale is earmarked for K-12 education, one of 13 beneficiaries that the state constitution sets forth for state land auctions.
The imminent development already has sparked concern in adjacent Club West, where homes along that community’s western edge are certain to lose at least some of their clear views of pristine desert.
And while there is considerable infrastructure work needed on the site in advance of actual homes going up, the appraisal found no geographical or topographical impediments to construction.
“There do not appear to be any atypical or adverse soil conditions which would prohibit single-family residential development on the subject,” the appraisal states.
Land Department documents indicate it will cost the winner at least $5.2 million in infrastructure improvements for storm drains and related work as well as unspecified roadway projects.
The development also will require the full widening of the now three-lane stretch of Chandler Boulevard – a cost the homebuilder usually pays – and the extension of Liberty Lane through the middle of the parcel.
The sold parcel initially was part of 620 acres of State Trust Land.
When that property was first put up for auction in the early 2000s, no one would bid because Tempe Union and Kyrene and then-Mayor Greg Stanton opposed the sale and developers were leery about being dragged into a prolonged legal battle.
Stanton said at the time that he did not want any of that 620 acres developed.
Instead, Councilman Sal DiCiccio and state lawmakers brokered a deal that allowed Phoenix to buy 240 acres on the north side of Chandler Boulevard for $18 million and set it aside as part of the South Mountain Preserve.
In return, Phoenix dropped its opposition to the development of the 373 acres.
City Council has virtually no say in the development of the land because it already is zoned residential. City officials say that all the developer will need is to follow the normal permitting processes.
About 300 acres of the site are zoned for single-family homes while 44 acres zre zoned multi-family and 11 for retail.