A proposal that Oro Valley accept a piece of ground rather than impact fees has been put on hold.
The Oro Valley Town Council on June 16 looked prepared to take up an offer from Steam Pump Village owner Evergreen Devco. The town would receive ownership of a 1.7-acre desert parcel in exchange for waiving $157,000 in development impact and permitting fees owed by BASIS Charter School, which is building a new school at the shopping center.
"We pulled it (from the agenda) just to make sure we're all on the same page," Oro Valley Mayor Satish Hiremath said.
Deed acceptance was struck from the agenda, and the matter was discussed in closed session. No decision was made. The property is located in the Steam Pump Village retail center on Oracle Road north of First Avenue.
Hiremath said representatives of Evergreen Devco, the property owner and developer, had expressed some concerns over what the town intended to do with the property. Under the existing planned area development agreement and zoning requirements, the property must remain natural open space.
Terms of the trade apparently had not addressed what the town could do with the open space, Hiremath said.
"If it's open space, it doesn't allow the town to develop it," Hiremath said.
While Oro Valley officials have not indicated any intention to develop the property for anything other than an open-space park, Town Attorney Tobin Rosen said the developer wanted to be sure the town would not use the space for equipment storage or as the site of a new water well. Evergreen wanted added assurances that the property would remain open.
"We had to work out some language (in the deed)," Rosen said. Any lingering issues were addressed, and the trade appears ready to move ahead at an upcoming council meeting, he added.
The Explorer was unable reach Evergreen Devco representative Gregg Alpert directly. Alpert left a telephone message saying the company had discussions with the town about allowable uses for the property once the transfer is made. Those would include use as a trailhead or an open-space park with minimal improvements.
The initial agreement, approved on March 8, held that Evergreen Devco would give the property to the town after an appraisal determined its value. The company agreed to pay the difference if the property value did not meet the costs of impact and permit fees.
Doug McKee, a longtime observer of town politics and former planning and zoning commission chairman, sent a council the letter questioning the appraised value of the subject property.
"In the case of this property, the land is zoned as 'natural open space park' per the PAD (Planned Area Development)," McKee wrote. "Thus application of the commercial use value is inappropriate and makes the appraisal flawed."
An appraisal, done by an appraiser agreed to by the town, valued the proposed trade property at $375,000 — $5 per square foot. The appraiser arrived at the value by determining the best use for the property would be as a commercial development.
While acknowledging the zoning as open space, the appraisal — done by the firm Burke Weissenborn — reflects a value for the property as a commercial development.
"Clearly, all large commercial developments are required to have some open space … therefore, the subject parcel has value to the larger Steam Pump Village development," the appraisal reads.
Town officials also anticipated the appraisal would reflect value as an open space parcel. At the March 8 meeting, when the town council unanimously approved the agreement with Evergreen Devco, Rosen indicated the appraisal would reflect current zoning.
"Any appraiser who looks at the property is going to have to take into account the fact that it already is designated as open space in the PAD and that would affect the ultimate value," Rosen said.
Comparable properties used to derive the $5 per square foot price were commercial sales at Tangerine Farms Road and Lon Adams Road; Rancho Vistoso Boulevard and Moore Road; Oracle Road and Linda Vista Boulevard; Benson Highway and Alvernon Way; and Oracle Road and Hardy Road.
The adjusted prices of those comparable properties range from $4.28 to $6.80 per square foot. All are zoned for commercial uses.
The 130,000-square foot lot BASIS school purchased at Steam Pump Village cost $1.3 million — $10 per square foot.
Mayor Hiremath also pointed out what he sees as problems with the agreement.
"This whole agreement took place at the dais," Hiremath said, referring to a March 8 meeting before he and others were elected to the governing board. He suggested the previous council that approved the trade hadn't properly studied the agreement.
Despite his reservations, the mayor said he would approve the deal going forward because the town could face legal problems if it attempted to back out. He'd hope the council pursues better-constructed arrangements in the future.
"What I told the council is that at some time we have to start governing with integrity," Hiremath said. "This is a perfect example."