,Title
Aviation Land Reuse Strategy Update - Authorization to Dispose of Additional Land Reuse Strategy Properties
Description
This report requests the Economic Development and Housing Subcommittee’s recommendation to authorize staff to prepare and issue competitive disposition processes for select properties in the Aviation Land Reuse Strategy (LRS) Planning Area west of Phoenix Sky Harbor International Airport (PHX). Additionally, this report details further actions being taken to redevelop LRS properties consistent with the Strategy.
THIS ITEM IS FOR CONSENT ACTION.
Report
Summary
LRS Background and Spark Area 1 Efforts
The LRS Planning Area encompasses 793 parcels (166 acres of land) acquired by the Aviation Department (Aviation) through the voluntary acquisition of properties under the Community Noise Reduction Program (CNRP). The Strategy, adopted by Aviation in 2020, provides direction to redevelop these properties in a manner beneficial to the community while being compatible with the land’s proximity to PHX.
Due to the large size of the planning area, about two square miles west of PHX, the Strategy contains a number of smaller focus areas. Initial efforts are starting within Spark Area 1, an area centered around 14th and Jefferson streets. At this location, Aviation owns a number of contiguous parcels more conducive for redevelopment opportunities, including opportunities for mixed-use residential development north of Jefferson Street.
Aviation has collaborated with the Community & Economic Development Department (CEDD) to prepare LRS properties for competitive redevelopment opportunities. The first was a Request for Proposals (RFP) seeking mixed-income housing on 1.1 acres in Spark Area 1. Unfortunately, the RFP received zero responses largely due to a Federal Aviation Administration (FAA) restriction that limited the term of the lease resulting from the solicitation. Subsequently, Aviation requested the FAA review and determine whether a subset of the properties could instead be sold as they have no long-term purpose under Aviation’s Comprehensive Asset Management Program. In 2022, the FAA completed its review under Part 163 of the 2018 FAA Reauthorization Act, which allows for more flexibility for airports to redevelop property not necessary for airport operations or long-term planning. In total, the FAA determined Aviation could sell 427 of the 793 LRS parcels provided certain use restrictions were implemented to ensure the long-term protection of Sky Harbor Airport.
Following the FAA Determination, City Council authorized a competitive public offer process for the Spark Area 1 properties at 14th and Jefferson streets. Staff is currently in negotiations with a developer proposing 50 mixed-income housing units on a site that would include the City-owned parcels and surrounding developer-controlled properties. Staff anticipates bringing business terms for this project to Subcommittee and City Council later this year.
To take further advantage of the FAA Determination, staff is requesting authorization to offer a number of LRS sites in and around Spark Area 1 through competitive processes. These LRS sites have been assembled into packages of nearby properties and include the following locations:
Package A
1314, 1329 & 1337 E. Madison St. (3 Assessor's Parcel Numbers [APNs]) - 0.48 acres
These three APNs are non-contiguous and would be made available via a public offer process seeking redevelopment. An appraisal of these properties in underway. Since these properties are south of Jefferson Street, the chosen offer would be required to deed restrict the properties to disallow residential use consistent with the Part 163 Guidance. Interest has been demonstrated to the City to bring these properties to market.
Package B
1229, 1233 & 1237 E. Washington St., 1310 E. Jefferson St. (4 APNs) - 0.74 acres
This site includes 0.37 acres of Neighborhood Services Department (NSD) property located on Washington Street containing a vacant commercial structure and surface parking. Due to this package's location north of Jefferson Street, residential mixed-use is allowed; therefore, staff seeks authorization to issue an RFP for this site. The site was rezoned to Walkable Urban Code T 5:7 in 2023.
Each proposer will be required to demonstrate successful completion of at least one vertical mixed-use development project of at least three stories in the last five years and offer a return to the City equal to or greater than the appraised value of the site. An appraisal will be ordered immediately prior to issuance of the RFP. The RFP will include standard terms and conditions and other necessary requirements. Responsive proposals will be evaluated by a panel that includes City staff and community representatives using the following evaluation criteria:
- Concept to Activate the Site (0-375 points).
- Return to the City (0-325 points).
- Proposer's Qualifications and Experience (0-300 points).
Following negotiations with the recommended proposer, business terms will be presented to this Subcommittee for review and recommendation, and then to the full City Council for approval.
Package C
1901 - 1949 E. Madison St., 1910 - 1918 E. Jackson St. - 2.95 acres
This Site contains parcels which have A-1 zoning and would not need to be re-zoned unlike other LRS properties, which are constrained by R-3 zoning. Staff is recommending a competitive public offer process due to demonstrated market interest. Staff would seek offers proposing small business users with moderate-intensity or small-scale manufacturing, consistent with the LRS.
Cultural Corridor and Yuma Pocket Park
The LRS was very comprehensive and directed the City to pursue improvements to the LRS Area beyond what could simply be achieved solely through land redevelopment. Staff will provide a briefing on the latest activities to implement the Culture Corridor within the LRS, which received a $10 Million Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grant authorized as part of the Bipartisan Infrastructure Law (BIL). Furthermore, an update will be provided to Subcommittee on the current status of delivering the Yuma Street Pocket Park envisioned in the LRS.
Spark Area 2
An update will be presented on efforts to further assemble properties within Spark Area 2 located northeast of 7th Street and Buckeye Road. Spark Area 2 is nearly 28 acres, of which nearly 70 percent is owned by Aviation. Voter approval of the 2023 GO Bond includes funds to strategically acquire private properties within the LRS to allow for transformational redevelopment of the area as envisioned in the Strategy.
Rezoning of LRS Property
Additional information will be provided on efforts to rezone and remove R-3 zoning from many of the LRS properties, particularly south of Mohave Street and Interstate 17, where demand for industrial and warehouse development has been demonstrated. On March 20, 2024, City Council authorized an agreement with an outside zoning attorney who will assist the City in strategically rezoning LRS properties, a precursor to bring them to market.
Public Outreach
Staff provided an update concerning recent LRS efforts to the Phoenix Revitalization Corporation on May 9, and to the Central City Village Planning Committee on May 20.
Location
Package A (3 APNs) - 1314, 1329 & 1337 E. Madison St.
Package B (4 APNs) - 1229, 1233 & 1237 E. Washington St., 1310 E. Jefferson St., 4 APNs
Package C (18 APNs) - 1901 - 1949 E. Madison St., 1910 - 1918 E. Jackson St.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Managers Mario Paniagua and John Chan, and the Aviation and Community and Economic Development departments.