State Trust Land parcel in Ahwatukee

The map shows the State Trust Land parcel in Ahwatukee that likely will soon become home to hundreds of new homes after a builder makes the winning bid in an auction likely to be held by early spring.

One of the last large tracts of undeveloped land in Ahwatukee – and the only remaining parcel of State Trust Land here – is headed for the auction block as early as spring.

The State Land Department is anticipating auctioning 373 acres of State Trust Land along the south side of Chandler Boulevard between 19th and 27th avenues and extending south to the South Mountain Freeway.

Home builders already are priming for the auction, which likely will begin within 10 to 12 weeks with a sale completed by mid-summer.

The starting price for the land has already been set at $105 million, according to Mark Edelman, the Land Department’s director of planning and Engineering for the Arizona state land Department.

“We have had a great deal of interest in this parcel from different parties, mostly home builders,” Edelman told the Ahwatukee Foothills Village Planning Committee in a briefing last week.

Land across Chandler Boulevard from the parcel is owned by the city and part of the South Mountain Preserve. Across 19th Avenue from the state parcel are the Arizona Greens and Foothills Club West communities.

People who might have thought the vacant state land was protected from development are due for disappointment on two fronts.

For one thing, Edelman explained, Trust Land exists for one reason: to be sold to the highest bidder “for the sole purpose” of providing money for 13 public service beneficiaries. 

The largest beneficiary is K-12 public education but others include state universities and even the Department of Corrections.

“State Trust Land is not public land,” Edelman reminded the planning panel. “It is land held in trust and the land really belongs to our beneficiaries. The state Land Department was created to act in their stead to manage this land. So, we are very different from public lands and we really need to be thought of more like private land.”

Secondly, the City of Phoenix will have almost no authority to stop development if and when a developer wins the auction.

The parcel – dubbed “The South Mountain 370” by the department – already is zoned mostly for homes and apartments.

According to a breakdown by the Land Department, 321 acres is zoned for various kinds of single-family housing development.

A total 44 acres fronted by 19th Avenue and the freeway is zoned for apartment and/or condominium development.

 Of that total, 33 acres is zoned R-2, allowing for apartment or condo buildings with a maximum height of two stories; the remaining 11 acres has a R-3A zoning classification, which allows higher density complexes of up to four stories.

Another 11 acres around 19th Avenue and the freeway is zoned C-2 – which provides for an almost unlimited variety of commercial uses.

However, Edelman said most of the land zoned R-3A and C-2 is “now under the freeway – so may be not much use for that property anymore.”

“But those others are still very desirable zoning districts,” he added.

The auction comes at a time when land is commanding almost unprecedented prices in the Valley, thanks to a continuing influx of new residents that the pandemic has barely dented.

Those prices make it even more appealing to the state to take advantage of the market on behalf of the beneficiaries the land is supposed to help.

Indeed, Edelman noted that while the Land Department sometimes waits for a developer to specifically make an offer to buy or lease the land, the Ahwatukee parcel is being prepared for a “Per Commissioner’s Initiative Sale.”

“Rather than having an applicant do all the leg work to bring a parcel to auction,” he said, “we are doing it in-house. We have conducted an infrastructure study on this parcel.”

Moreover, the Ahwatukee parcel – the last piece of State Trust Land in the community – would likely be extremely attractive to homebuilders because of its proximity to the freeway system.

Thanks to the currently unquenchable demand for homes – fueled by low interest rates, a shrinking inventory of re-sale homes and the Valley’s rising population – construction of new homes and apartment complexes has seen a major resurgence in recent years.

That resurgence likely will continue, experts say, pointing to record numbers of building permits issued in the past year.

The Land Department’s Board of Appeals, a panel of five experts appointed by the governor that determines approves appraisals of Trust Land parcels, met Dec. 10 to approve the appraisal for the South Mountain 370.

Although Edelman told the panel that South Mountain runoff impacts part of the parcel significantly, it is not known how that factored into the appraisal.

Land Department spokesman Dave Cherry told AFN that the appraisal was not yet available.

No date has yet been set for the auction but Edelman told the Planning Committee he expects that to happen within the next 10 to 12 weeks. A notice must run for 10 weeks leading up to what will be a live auction.  

Edelman told the Village Planning Committee the appraisal is good for six months, so it appears the state hopes to complete the process by mid-summer.

And he is hoping the land goes for a higher amount than the minimum bid.

“We could have one bid and be finished or we could have many people getting in the room – as we have had on some of our recent auctions,” Edelman said. “I would certainly hope for the latter and that we could have a very active auction.”

That the land would eventually be developed has been no secret and it factored into a fight between the Planning Committee and the city Street Transportation Department four years ago.

Back in the fall of 2016, the city proposed completing Chandler Boulevard by building a 1.2 mile segment between 27th and 19th avenues called the Chandler Boulevard Extension.

Then Planning Committee Chairman Chad Blostone was alarmed by the plan because the city wanted to build only two lanes that would be connecting two four-lane segments.

Under pressure from Blostone and Councilman Sal DiCiccio, the city relented and agreed to include a third turning lane.

During planning committee hearings on the project, city officials also said that once the state land would be developed, a fourth lane would be added – likely at the developer’s expense, they said.

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