Title
Authorization to Dispose of Aviation Land Reuse Strategy Properties
Description
Request to authorize the City Manager, or his designee, 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).
Report
Summary
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 2 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 Street and Jefferson Street. 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 and 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.
Following the FAA Determination, City Council authorized a competitive public offer process for the Spark Area 1 properties at 14th Street & Jefferson Street. Staff is currently in negotiations with a developer proposing 150 mixed-income housing units on a site that would include the City-owned parcels and surrounding developer-controlled properties.
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 is underway. Since these properties are south of Jefferson St., 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 property located on Washington St. 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 a Request for Proposals (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 seven 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 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. (18 APNs) - 2.95 acres
This Site contains parcels that 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 with small business users and moderate-intensity or small-scale manufacturing, consistent with the LRS.
Financial Impact
There is no impact to the General Fund as a result of this action.
Concurrence / Previous Council Action
This item was recommended for approval by the Economic Development and Housing Subcommittee at the Jun. 12, 2024 meeting by a vote of 4-0.
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.
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, Alan Stephenson and John Chan and the Aviation, Neighborhood Services and Community and Economic Development departments.