The development site is located near the intersection of North Scottsdale Road and State Highway 101. The auction is intended to kick off development of a larger 2,400-acre area known as Paradise Ridge.
Arizona Land Commissioner Mark Winkleman says planning for the entire acreage has been under way for several years. The parcel is master-planned for a development of more than one million sf of retail along with hospitality and office space and other commercial uses. The state is offering a 99-year ground lease.
Winkleman says Chicago-based Urban Retail Properties LLC, developer of Water Tower Place in Chicago, and at least one other major developer have shown an interest in the auction. But, he assumes others who prefer to "keep things close to the vest" will make bids.
"We don't know who's going to show up till the day of the auction," he tells GlobeSt.com. "But this is probably as prime a site as you'll find anywhere in the Southwest, maybe the best site."
The state owns thousands of acres in the general area and is re-leasing Paradise Ridge land to meet regional demand for new development due to rapid population growth. The area has been planned for a wide mix of residential, commercial and recreational development, including one and possibly two golf courses.
Revenue from the department's land auctions is used to fund schools, hospitals, prisons and other state-run institutions. Money from Paradise Ridge has been designated for the state's Permanent Common Schools fund.
"Most of the land my department oversees is auctioned to home builders, but this particular property is commercial," Winkleman says. "Last spring we sold a higher-density piece of land in North Phoenix for $150 million. I think that's the biggest deal we've done so far." In that auction, Desert Ridge Holdings paid nearly $149.5 million for a 269-acre parcel Paradise Ridge to develop 2,800 multifamily units and 900 single-family homes. Desert Ridge Holdings, an entity of Phoenix-based Rightpath Limited Development Group, was the sole bidder.
Other parcels in Paradise Ridge will be auctioned over the next several years. Winkleman expects build-out of the entire area will take at least 10 years.
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