Smart development of state land requires a new approach to selling it, reformers say

One of Arizona’s biggest economic-development tools is land, but the state’s biggest landowner could use some help pitching its sites.

More than 9 million acres, including several key parcels in the path of growth, are managed by the Arizona State Land Department.

Companies looking for large swaths of dirt to build manufacturing sites near metro Phoenix or Tucson eye state land parcels, including the 275-square-mile Superstition Vistas in Pinal County.

But companies often or must opt to expand or relocate to parcels that are privately owned, and not because of lower land costs.

Unlike real-estate investors and developers, the Land Department must follow strict laws crafted almost a century ago, which can slow down the development process.

The state agency must sell to the highest bidder, even if another group has a better plan or financing. So a company such as Tesla Motors could choose a piece of state land on which to develop its huge battery manufacturing facility and proceed with those plans for months, only to be outbid at a land auction.

The state agency also doesn’t have the budget to pay for detailed planning of its land, or marketing of its land.

Efforts to update the state agency’s operating laws have failed a few times. The last defeat was in 2009.

“We should give up on trust land reform. We have tried too many times and waited too long,” said Grady Gammage, an Arizona real-estate attorney and growth expert. “We should forget reform and try to be as creative as possible.”

Gammage, who has studied the system for decades, believes an alternative and legal solution is to sell big blocks of land to deep-pocked developers, which then can quickly resell or lease the land to a company like Tesla, which manufactures electric vehicles.

Or, Gammage said, the land could be leased to a non-profit such as the Greater Phoenix Economic Council, which then could transfer the lease to a potential employer looking to grow in Arizona.

Most real-estate experts don’t think Tesla will choose a state-land site if it does choose an Arizona site over Texas, New Mexico or Nevada, because many of those sites lack transportation and other infrastructure that the company likely will need immediately.

But the company’s interest in Arizona, along with the land market heating up, has brought the trust-land debate back to the front burner.

Mark Winkleman, a former state land commissioner who left the agency in 2011, understands why Gammage is giving up on reform but believes the state agency still needs help with funding to plan its big parcels and set aside land for preserve sites before growth pressures overtake the agency.

Maria Baier, CEO of the Tucson-based Sonoran Institute and another former land commissioner who left the state agency in late 2012, isn’t aware of any efforts to get land reform on the ballot this fall. But she continues to back it.

Current Land Commissioner Vanessa Hickman said the state agency is busy doing transactions again, after the slowdown from the real-estate crash, and working on bringing more land to auction, including parcels in the 275-square-mile Superstition Vistas site in northern Pinal County.

“We are really working on the North-South Freeway and talking to stakeholders about that going through Superstition Vistas,” she said.


Catherine Reagor, The Republic |


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