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Tucson, Arizona | Published: 07.06.2008
The Tucson Unified School District is poised to play its own version of Let's-Make-a-Deal with local developers, proposing a swap of some of its vacant land in exchange for land that can be used to build new Southwest Side schools.
The TUSD parcels, mostly clustered on the East and Northwest sides, are nuggets of vacant land that range in size from four to 60 acres.
The district knows there are some nibble-worthy ones in the batch of 16 being offered up, given that developers have called periodically through the years trying to gauge what the district intends to do with them.
Take 17 acres on the Northwest corner of River and Sabino Canyon roads, one of the primo parcels that's likely worth a minimum of $200,000 an acre.
A parcel across the street is selling for $16 million. Granted it's larger, not all of it is buildable, and it needs the right zoning to make the numbers work, but it's still going for $500,000 an acre — which bodes well for TUSD officials hoping to unload the land so they can take some of the pressure off overburdened schools in more rapidly growing sections of the district.
Just west of there, where River would meet Wilmot if Wilmot went through, sits another 9.5-acre parcel. That one's assessed at a half-million, but district officials are fairly sure it would translate into bigger bucks on the open market.
Then there's a 40-acre parcel on the far West Side just south of Marana, at Sweetwater Drive and El Moraga, assessed at $1 million.
But just as conditions have to be right to make sure a souffle doesn't turn into unusable mush, so it is in this case.
The market itself is causing a bit of a wrinkle, although district planner Bryant Nodine doesn't sound too concerned.
"The real estate market is in a slump, but commercial is still going strong. And developers are always looking ahead at what might be going on with the market in a few years," he said. "They're not necessarily limited by the current market."
Another problem is that the sites mostly carry fairly rural zoning, many of them at one home per three acres, so interested developers may have to go through lengthy and often contentious rezoning battles.
The bigger wrinkle is that developers can't just fork over the bucks. If TUSD sold the pieces outright, any proceeds would have to go toward paying down the district's outstanding bond debt of about $269 million and couldn't just be siphoned off to pay for new schools.
The district badly needs new elementary schools in the fast-growing area bordered roughly by Kinney Road to the north, Airline Road to the west, Herman's Road to the south and Mission Road to the east. And of its 15 schools that are well over capacity, 11 are in that vicinity.
Grijalva Elementary, for example, was built for 440 students and last year had 743.
Lynn-Urquides was built for 580 but last year had 939. Miller had 704 students, even though it was built for 440. Vesey, built for 320, had 783 students.
Nodine said demand would justify the building of four new schools, but two would soften the crunch.
In late June, a group of parents, teachers and other interested parties took a tour with school officials to study a quartet of sites that might be appropriate for schools.
When the district issues the request for proposals later this month, it will prioritize those sites so developers will know which they'll need to secure for the land swap to happen.
For now, TUSD has declined to identify any potential sites, to ensure prices don't become inflated because of the interest.
Heidi Legg Burross, a University of Arizona education professor, has a 6-year-old son at Banks Elementary and a 10-year-old daughter at White.
"We moved out there because we could get more land. We live on an acre, and that's very appealing," she said.
Though the growth has slowed from the breakneck pace of two years ago, she's still concerned about how long the schools can continue to absorb the influx.
"The overall size of the school is not that important to me, but I worry about large class sizes," she said.
Burgess said if a land swap will work, she'd be in favor of it.
The district has rarely undertaken land swaps, and they can be dicey. The most recent got off the ground in mid-2002, when the Governing Board agreed to give the aging and mold-ridden Davidson Elementary, 3915 E. Fort Lowell Road, and two vacant parcels worth about $4.4 million to the Utah-based Summit Development Group. In exchange, the district got 10 acres just north of the school and almost $4 million toward construction of the new campus.
The deal took four years to come to fruition, though, with permit delays, concrete shortages and high demand for workers all slowing construction.
James Marian, a designated broker with Chapman Lindsey Commercial Real Estate Services, said the market is weaker than it was a few years ago, but good locations still can command decent prices.
And on one level, he said, the state of the market is less of a concern going into a land swap because as long as the trade is even and the pieces are valued fairly, it doesn't matter if they're both worth 25 percent less than they might be in a stronger market.
The bigger question is whether buyers are willing to jump into the complexities of such a deal.
"When you make a transaction subject to a land swap, you are greatly restricting the number of people who would be interested," he said. "Real estate is already complicated, and when you make it more complicated, there will be fewer people interested in going through that. It's one thing if there's a piece of property and an interested party can just write a check. It's another if you have to go secure a piece of land that will work for a school and then arrange a swap."
Marian said he expects in the case of the River and Sabino Canyon parcel, for instance, there will be buyers willing to go the extra mile, but much will still hinge on how much developable land is available on each parcel and whether rezonings are attainable.
Real estate broker Steve Long agreed there are a lot of questions yet to be answered. Though he couldn't comment specifically on TUSD's situation, he said, generally, that land swaps often are quite involved. Both parties have to accept the properties, get appraisals and then hash out how to make up the value difference between the parcels.
"There's a lot of work involved, with a certain amount of risk to the buyer and no guarantees the exchange will work," he warned.
● Contact reporter Rhonda Bodfield at 806-7754 or at rbodfield@azstarnet.com
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