Title
Aviation Land Reuse Strategy Land Disposal Located Adjacent to Interstate 17: 16 Parcels within Area G and 5 Parcels within Area I (Ordinance S-52257) - District 8
Description
Request to authorize the City Manager, or his designee, to perform all acts necessary to sell City-owned property identified by the Aviation Department as excess Aviation Land Reuse Strategy land inventory at a price negotiated on the open market based on the City's appraisal to Valutek, Inc. and De Rito Partners Development, Inc. Additionally, request to authorize the City Treasurer to accept all funds related to this item.
Report
Summary
The Phoenix Sky Harbor International Airport (PHX) Land Reuse Strategy (LRS), developed in 2017, addresses the reuse and redevelopment of 793 fragmented City-owned parcels acquired for noise mitigation. In December 2022, the Aviation Department received Federal Aviation Administration (FAA) authorization for the disposal or redevelopment of 427 of these parcels. In April 2025, the Community and Economic Development Department (CEDD) requested and received City Council authorization to dispose of parcels in Areas F, G, H, I, and J, per the FAA's determination (Ordinance S-51817). Working in coordination, Aviation and CEDD prepared two groupings for public offering.
Grouping A
The entire Area G between 12th and 14th streets and north of Interstate 17. The grouping consists of 16 separate and non-contiguous parcels, and their development potential is impacted by their irregular shape and size, and remaining private property owners within the block (Attachment A). The parcels are zoned R-3 and appraised at $1,690,000 as of March 2025.
Grouping B
A portion of Area I located at 16th Street and Watkins Street. The grouping consists of five separate and non-contiguous parcels, which impacts their development potential (Attachment B). The parcels are zoned A-2 and appraised at $790,000 as of November 2024.
Public Offering Process
The groupings were offered for sale from April 22 to May 21, 2025, (30 days) through the City's website and an ad in the Arizona Republic. Each offer was required to include:
- A narrative of intended site use and/or business operations.
- A preliminary conceptual site plan or improvement description.
- An offer meeting or exceeding the appraised value.
Results and Recommendation
The City received one offer for each grouping. Staff reviewed the offers and recommends the following:
Grouping A
The recommended buyer, Valutek, Inc., proposes a two-phased development. Phase 1 will consist of a 45,000 square foot state of the art headquarters including: 5,000 square foot office, 5,000 square foot clean room manufacturing space, and 35,000 square foot warehouse. Phase 2 will require additional privately owned parcel assemblage with a timeline to be determined based on the surrounding parcel owners. The buyer has submitted an offer of $1,690,000 for all 16 parcels. The offer meets the appraised value.
Grouping B
The recommended buyer, De Rito Partners Development, Inc., proposes to construct a modern convenience store and gas station, designed to serve the area's high volume of commuters, logistic teams, and small business owners. Additionally, two light industrial buildings will be constructed providing vital infrastructure to support the area's growing workforce and business ecosystem. The buyer has submitted an offer of $790,000 for all five parcels. The offer meets the appraised value.
All disposals will require execution of an avigation easement and include a deed restriction prohibiting residential use.
Financial Impact
The total revenue from this disposition will be $2,480,000 and will be returned to the Aviation Department.
Concurrence/Previous Council Action
The City Council authorized the disposition process on April 9, 2025, with Ordinance S-51817.
Location
Grouping A (16 Assessor Parcel Numbers) - Multiple addresses, see Attachment A.
Grouping B (5 Assessor Parcel Numbers) - Multiple addresses, see Attachment B.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager John Chan and the Community and Economic Development Department.