Will Fountain Hills land sale lay egg? - East Valley Tribune: East Valley Local News

Will Fountain Hills land sale lay egg?

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Posted: Monday, February 12, 2007 2:25 am | Updated: 8:11 pm, Fri Oct 7, 2011.

When a prime chunk of Fountain Hills desert land goes on the auction block next month, three of the Valley’s top developers seem content to sit out any bidding war. And their reluctance comes even after a drastic discount.

But the names of two other land development firms have surfaced for the 1,276-acre parcel, located on the town’s northeast side.

When the Arizona Land Department opens the auction on March 15, the bidding will start at $95 million. That’s almost 27 percent less than an assessment made last year, during the local real estate market’s peak.

Last summer, developers thought the $130-million price tag was too steep, and expressed little interest in the state’s first auction. After a reevaluation of the property, the appraised value is down — but that doesn’t mean prospective bidders’ interest is up.

MCO Custom Properties, Pulte Homes and SunCor Development Co. all said they had no plans to take part in the coming auction. Although the firms declined to get into specifics, there were cautious expressions of concern about the land’s potential.

“We’re not sure we can do our land plan,” MCO President Jeremy Hall said. “It’s really more the city’s vision for it versus our vision for it.”

Added SunCor consultant Maria Baier: “Looking at that piece of property, we’re struggling with how to make it work. It’s got some challenges, in terms of developing. Broadly, infrastructural-type challenges.”

One problem with the land stems from a dispute over exactly how many residences it can hold.

The town’s zoning supports a maximum of 1,750 units. But officials with the Fountain Hills Sanitary District — a governmental entity separate from the town — said they would be unable to service more than 1,071 homes on the land without expanding the wastewater treatment plant, which they have resolved not to do.

Still, with views of Four Peaks and the McDowell Mountains, and unspoiled terrain, at least one out-ofstate development company might be interested in the parcel.

SunCal Companies, of Irvine, Calif., currently has more than 250,000 residential units in various stages of development throughout the West and Southwest, mostly in California.

In December, SunCal qualified but did not participate in an auction of state trust land near Apache Junction.

And last June, SunCal paid $34 million for 470 acres near Lake Havasu City.

SunCal, when reached for comment, neither confirmed nor denied interest in the Fountain Hills land.

“SunCal Companies is always looking for new development opportunities,” spokesman Joe Aguirre said, “but we cannot say whether or not the company has any interest in placing an offer on this particular property.”

Another possible bidder is Scottsdale-based Miller Holdings.

Over the last two years, Miller has been an active participant in the south-central Arizona real estate market. News reports show the company has spent at least $248 million for 4,000 acres, in areas such as San Tan Heights, Peoria and Maricopa, a city south of the Valley. Miller Holdings did not return repeated calls seeking comment.

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