Peoria and Arizona State Land Department sign IGA to bring 6,700 acres north of Lake Pleasant to market; city to front infrastructure
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Summary
Council approved an intergovernmental agreement with the Arizona State Land Department to plan and advance public infrastructure for roughly 6,700 acres in North Peoria (the “Peoria Innovation Corps”), using an initial $140 million CIP seed to leverage infrastructure development and recover costs through future land transactions.
The Peoria City Council on Dec. 17 approved an intergovernmental agreement with the Arizona State Land Department (ASLD) to plan and advance infrastructure for the 6,700‑acre Peoria Innovation Corps (PIC) north of Lake Pleasant Parkway, a multi‑decade effort city officials say will create jobs, retail and development opportunities while returning substantial value to the state land trust.
Deputy City Manager Mike Faust and City Manager Henry Darwin described the IGA as a two‑part approach: the city will lead land planning and zoning work on ASLD‑owned parcels, and the city will design and build arterial roads and associated utility systems ahead of auctions to shorten development timelines and increase land value.
Faust summarized the financial structure: the council previously approved roughly $140 million in CIP seed funding that the city will draw from to construct initial arterial and utility projects. Upon substantial completion of a city‑led infrastructure project, the city will accrue interest on those funds; when state land parcels are auctioned and patented, the purchaser will reimburse the city for soft costs (design, permitting, right‑of‑way) and for 50% of hard costs attributable to the parcel; those receipts will replenish the holding account and fund subsequent infrastructure phases. Staff estimated the program could support roughly $500 million of public infrastructure investment over the project lifecycle and projected a conservative long‑term return to the state trust in the range of $1 billion to $1.5 billion, driven by land auctions and development.
Faust emphasized that ASLD is statutorily constrained from encumbering state trust lands and lacks some resources for planning; the IGA delegates planning authority for the PIC area to the city with public outreach and PCD‑style zoning to follow. City staff said the planned work includes annexation of a narrow western sliver of property, a detailed list of arterial and utility projects and an incremental, market‑driven delivery schedule so infrastructure is built only as demand solidifies.
The IGA incorporates governance safeguards: city and state will meet at regular intervals to sequence projects, protect against overbuilding and coordinate parcels brought to market; reimbursements are tied to auctions and patenting, not speculative land values. Staff said design work for phase‑1 Lake Pleasant Parkway and Ashlar Hills was already moving rapidly with early designs expected in the first quarter of 2025 and potential construction starts in July 2025. Council approved the IGA (agenda item 30R) by a 7‑0 vote.
Ending: City and state staff will advance planning and initial infrastructure design under the IGA, with phased construction tied to state land auctions and reimbursement terms that staff said will allow the city to recycle CIP seed funding into later phases.
