Homebuilders have their eye on Fountain Hills

Home builders eye state trust land
Fountain Hills may annex site
Jessica Coomes The Arizona Republic Mar. 15, 2006 12:00 AM
FOUNTAIN HILLS - At least four major Valley home builders are interested in developing the more than 2 square miles of state trust land north of town that the state plans to auction and Fountain Hills plans to annex.• Fountain Hills-based MCO Properties pictures high-end, custom homes on most of the developable land, and would build far fewer than the land's 1,750 potential home sites.• SunCor Development Co. of Tempe imagines homes on the same piece of land that would capitalize on the surrounding open space. • Pulte Homes, with regional offices in Scottsdale, also is interested in the state trust land, but spokeswoman Jacque Petroulakis declined to comment about Pulte's possible plans.• Toll Brothers Homes, which also has regional offices in Scottsdale, is interested, but also declined to divulge specifics, a representative said.The 1,312 acres of state trust land will be auctioned by June to the highest bidder by the Arizona State Land Department. "It's such a magnificent piece of ground, and that's why we're working so hard on it," said Jim Adair, SunCor's director of community development. Fountain Hills officials are working with the Land Department to decide what the eventual owner, or owners, of the land will be allowed to build.A proposed agreement between the state and the town would allow a developer to build no more than 1,750 homes, while keeping at least 700 acres as open space and still having room for a 42-acre park, a 12-acre commercial area and a resort.On April 20, the Fountain Hills Town Council will consider the agreement with the state and an amendment to the town's General Plan, which guides future development. If, as planned, Fountain Hills annexes the property in the coming months, the eventual owner will be required to build according to town codes.
MCO details plansIf MCO wins the auction, the state trust land project could be the company's last development in town.After the company wraps up its Eagles Nest and Adero Canyon projects, MCO, the successor to the town's master developer, would be out of major parcels of land on which to build.Though MCO would like to build mostly custom homes on the state land, it also would like to construct some production homes and multifamily buildings, MCO President Jeremy Hall wrote in a letter to town officials.Fountain Hills is zoning most of the property for lots from 6,000 to 10,000 square feet. MCO would build homes on much larger lots, and Hall said he fears MCO would have to get the lots rezoned after the auction, which he said could be halted by a referendum.This risk, Hall wrote, would hurt MCO when attracting investors.Town Manager Tim Pickering allayed Hall's apprehensions in another letter, writing, "The town would welcome, and the proposed GPA (General Plan amendment) would allow, a development scenario utilizing a higher number of larger, custom lots with fewer community lots."
SunCor's thoughtsSunCor previously worked with MCO to build the SunRidge Canyon development.If SunCor won the auction, Adair said it would like to build a development similar to SunRidge Canyon, which has homes from 1,700 to 3,500 square feet with even larger custom homes.Adair said the company would market the open spaces, though it does not plan to build a golf course.SunCor would like to build the maximum 1,750 homes, although Adair said he does not think it would be possible because of limitations from the steep slopes in some areas and sewage hookup limits.Ron Huber, general manager of the Fountain Hills Sanitary District, said the current facilities could not handle 1,750 homes without the construction of a new sewage treatment plant, which would cost the developer millions of dollars.The district can currently handle as many as 1,071 new homes, Huber said. That capacity could be greater, he said, but the developer would have to commission a study to say for sure."Wastewater is a challenge at this point," Adair said. "We're trying to figure that out."SunCor had submitted an application to buy the land, which started the ball rolling for the sale. After submitting the application, Adair said, the company had little involvement with the planning.
Highest bidderSunCor does not get any preferential treatment on auction day. The winner is the one who spends the most money.The state appraises the land, and the appraised value is the minimum it could be sold for at auction. The trust property near Fountain Hills has not yet been appraised.The Land Department's goal is to get as many bidders as possible to boost bids on auction day. Public K-12 schools receive about 90 percent of the revenue from state land auctions, with the rest divided among several state agencies.Deputy Land Commissioner Richard Hubbard said he did not know how many developers would bid on the property near Fountain Hills, but, "Anything could probably happen."More than 9 million acres of Arizona land set aside at statehood in 1912 remains in a trust that is managed by the Land Department.