This Wednesday, Oro Valley Town Council members are expected to vote to accept a deed transferring ownership of property in Steam Pump Village to the town.
The council recently approved a proposal to accept the strip of undeveloped desert rather than impose impact and permitting fees for BASIS, the charter school under construction within the development.
An appraisal completed last month to determine the value of the unimproved parcel, a 75,000-square-foot tract, estimates the land would fetch $375,000 on the open market.
"In essence, it's a tangible asset," Oro Valley Town Councilman Bill Garner said, adding the property would enhance the town's open space and parks reserves.
The council agreed to the trade to expedite the development of the highly regarded public charter school BASIS, which recently purchased 130,000 square feet of land within Steam Pump Village for $1.3 million to build the new school.
The property owner, Evergreen Devco, brokered the agreement on the open space, saying it would turn the parcel over to the town in exchange for Oro Valley not charging BASIS Charter School permit and impact fees — an estimated $157,000. The agreement also calls for waiving public art fees, whereby commercial development is required to spend 1 percent of the cost of construction on art displays.
Evergreen paid for the appraisal. The company and the town agreed on the appraiser hired to conduct the work.
The appraisal document considers the subject property, a 1.7-acre section of a 14.75-acre portion of Steam Pump Village, to be commercially viable. The appraiser writes, in part, "I have concluded that the highest and best use of the subject site is for investment for future mixed commercial use…"
Yet the specific property, although facing commercially desirable Oracle Road, is zoned for open space and restricted from development. In its entirety, Steam Pump Village encompasses 41.6 acres, 20 percent of which must remain open space.
A recent Arizona Supreme Court decision lies at the heart of why the exchange had to transpire.
"Post Turken v. Gordon, the Supreme Court made it clear you couldn't accept something like 'economic development'," Oro Valley Town Attorney Tobin Rosen said.
In the Turken v. Gordon decision, the court said governments could not waive impact fees or offer sales tax rebates to developers without receiving something of equal value in return.
"They had to come up with something of value," Rosen said.
Oro Valley Town Councilman Barry Gillaspie said the trade effectively meets the new standard set by the court.
"I think that's really good for the whole community and definitely has value," Gillaspie said.
The councilman said the property, which sits adjacent to existing trails, would be a recreational asset. It is close to a recently installed pedestrian and bicycle bridge crossing the Cañada del Oro Wash. The property would improve trail connectivity, adding to the quality of life in Oro Valley, Gillaspie added.
In a letter to Rosen dated March 5, attorneys with Lewis and Roca representing Evergreen Devco said the trade property would hold value to the town if left as open space or dedicated as a park.
"The PAD requires that the Open Space Property be set aside in its natural condition," attorneys wrote. "However, there would be no public access and the private property owner could expressly restrict public access."
The PAD identities the area as open space, using the term "Natural Open Space Park" on maps included in the plan. It also states among the design requirements of Steam Pump Village that: "Phase IV shall be designed in a manner to provide visual and pedestrian access to the open space mesquite bosque that is prescribed for preservation."
The trade also takes the property out of the private sector and places it in public ownership, thereby making it property tax-exempt. Now in public hands, the area could be used for a park or other recreational uses. Town officials have not yet made plans for the property.
"In the long run," Gillaspie said, "I don't think we've fully determined what we'll do with the property."