Scottsdale preserve condemnation cases loom

Scottsdale’s McDowell Sonoran Preserve returns to the front-burner in the coming weeks, with the city struggling to resolve two eminent domain trials and receiving 10 acres of donated land.

GRAPHIC: More land for the preserve
View CGP-Aberdeen property map

On Tuesday, the City Council is slated to consider a settlement in the condemnation of 50 acres formerly owned by development firm CGP-Aberdeen for the preserve. However, the Arizona Court of Appeals last week dealt the city a setback when it overturned a lower court’s ruling on the land’s value and ordered a new trial.

That means the proposed settlement — already nearly 50 percent higher than the city hoped to pay — could be thrown into doubt, said Bruce Washburn, assistant city attorney.

“Both parties need to discuss whether both sides are prepared to go through with (the settlement,)” Washburn said.

The land is situated on Rio Verde Drive just south of The Golf Club Scottsdale, 29001 N. 122nd St.

In the trial, the city argued that state law pegs the value of condemned land on the day of the initiation of condemnation proceedings. The land’s value on that date, Jan. 13, 2003, was $4.88 million.

CGP-Aberdeen, on the other hand, argued that the land should be priced on the date the city actually took possession. That didn’t happen until 18 months later, on July 15, 2004. The developer’s lawyer, Dale Zeitlin, has said the real estate market was booming at the time, and the land’s value increased significantly in the interim.

The proposed settlement would set the price at $7.3 million. That breaks down into the $4.88 million the city already has paid to obtain possession of the parcel from CGP-Aberdeen, plus an additional $1.92 million, and $500,000 in interest.

If the case goes to a new trial, city attorneys expect CGP-Aberdeen to seek up to $10 million. Washburn said the proposed settlement represents a compromise.

In a separate eminent domain case involving development firm Toll Bros., city lawyers have filed a motion for new trial after a jury recently placed the value of 383 acres the city condemned in 2004 at $82 million — about $48 million higher than the city expected.

The parcel, situated east of Thompson Peak Parkway between Bell Road and Union Hills Drive, is part of a 543-acre area the city plans to transform into Gateway Access Area, the main trailhead and parking area for the planned 36,000-acre McDowell Sonoran Preserve. The gateway area could be completed as early as September 2009, city officials have said.

Washburn said the clock doesn’t start running on the city’s chance to appeal the jury verdict until the judge renders a decision on the motion for new trial. It’s unclear when that could happen, he said.

“The judge is going to rule when the judge is going to rule,” Washburn said.

Also on March 18, the City Council is scheduled to accept a donated conservation easement valued at $1.6 million on 10 acres of land straddling the preserve’s boundary just north of DC Ranch in the Pinnacle Peak area.

Although the donor hoped to remain anonymous, city documents list her as Leslie Dashew, chairwoman of the Scottsdale Center for the Performing Arts’ Board of Directors.

Because half of the 10-acre parcel sits outside of the 36,400-acre area established by Scottsdale voters in 1995 for eventual inclusion in the preserve, the gift expands the preserve’s boundaries by about five acres. Dashew will retain ownership of the land, but the easement prevents any construction there.

Ruthie Carll, executive director of the nonprofit McDowell Sonoran Conservancy, said Dashew hoped the Conservancy would get the credit, to encourage more people to donate land for the preserve. Dashew had granted the easement to the nonprofit, which in turn will hand it over to the city, Carll said.

A potential settlement in a third eminent domain action is on the council’s March 18 agenda, as well. The settlement would have the city pay Olie Swanky $1.34 million, plus $134,000 interest, for 15.4 acres of land located a quarter-mile south of Paraiso Drive, west of 130th Street. The settlement is about 24 percent higher than the city’s appraisal of the land’s value, according to a report on the case prepared by city attorneys.