Peoria council OKs $1.41 million contingency to bid on 834‑acre state land parcel

The Peoria City Council on Tuesday approved a $1,412,000 contingency budget transfer to cover administrative fees required for the city to participate in an Arizona State Land Department auction for an 834‑acre parcel called Core 2, part of the Peoria Innovation Corps project. The council vote was 7-0.

City staff described the purchase as part of a multi-year strategy to acquire state trust land, prepare shovel‑ready parcels for development and spur economic growth. "We have every intention of participating in this auction," said Mike Faust, deputy city manager. The auction was publicly noticed for 10 weeks and is scheduled to begin at noon Wednesday, staff said.

The parcel is appraised at $46,700,000; state auction rules require an initial deposit to qualify as a bidder. Kevin Burke, deputy city manager, said the city must bring a minimum of $6,212,000 to the table to bid, a figure that includes a 10% down payment and roughly 3% in administrative fees and other charges. The city's capital improvement program (CIP) had budgeted $4,800,000 for the down payment, so staff requested a $1,412,000 transfer to cover the difference and associated fees.

Why it matters: City officials said acquiring and developing state land would give Peoria control over road rights of way and allow the city to deliver public infrastructure for future development. The conveyance would include rights of way for planned roadways such as 90th Avenue and extensions of Lake Pleasant Parkway, staff said. The city also noted that a previously approved intergovernmental agreement provides for reimbursement of public infrastructure costs by a successful bidder.

Staff described the process and obligations that come with buying state trust land. The state requires due diligence before auction, including a cultural (archaeological) survey, an environmental study and an ALTA boundary survey; those reports were used by a contracted appraiser to set the minimum bid. If the city is the winning bidder, it would receive a certificate of purchase after the state takes the deposit, then must complete partial patent applications (minimum 20 acres per takedown) to obtain deeds. Staff said the state requires purchasers to patent a proportional amount of undevelopable land along with developable acreage and charges interest on unpaid balances at the secured overnight financing rate (SOFR) plus 4.5% (about 8.83% at the time of the meeting).

The city also noted that the state participation agreement includes guidance on development and a provision to split net proceeds 50-50 with the state if the city sells land for a profit.

Public comment at the meeting included both support and concern. Ruthie Goldkorn, a Peoria resident, told the council that building near an aquifer "can have significant environmental and social consequences," citing potential water‑quality degradation, increased runoff and over‑extraction. Goldkorn asked what studies had been done and urged the council to reconsider the location. Another resident asked whether the environmental report and other due‑diligence documents were available to the public. "Is there public information for that?" the speaker asked.

Edward Molina, a lifelong West Valley resident and member of Peoria's economic development boards, said he supported the purchase and welcomed the potential tax revenue and jobs the project could bring.

Council action and next steps: After the discussion, a council motion to approve agenda item 16R as presented passed 7-0. Staff will proceed to participate in the state land auction, and city presenters said they plan to return to council with results and subsequent steps if the city is successful.

The meeting record shows the city began the application process in December, the planning agreement was executed in March, and an appraisal review board met June 13; the public notice period ended Aug. 22. Staff emphasized that the auction process is governed by the Arizona State Constitution and Arizona Revised Statutes and that the city must follow state procedures and the terms of the participation agreement if it becomes the winning bidder.