Phoenix unloading hundreds of properties
Internal review shows the city let prime land sit unused
Phoenix plans to dramatically shrink its portfolio of city-owned real estate after an internal review found the city doesn’t need at least 656 pieces of land that it owns.
That number includes hundreds more excess properties than officials previously acknowledged, and comes after an Arizona Republic investigation revealing widespread concerns about Phoenix’s land-management practices.
Among The Republic’s findings: The city owns a substantial amount of vacant lots — about 1,400 individual properties covering 2.3 square miles with a combined assessed value of more than $150 million.
The Republic’s report last fall detailed how the vacant lots are a scourge in neighborhoods from south Phoenix to Sunnyslope. Residents complain the empty dirt parcels create problems with illegal dumping, dust and weeds. Some accuse the city of violating its own blight codes.
Developers also criticize the city for sitting on prime land in the urban core. They
said Phoenix has stiffed opportunity in some areas, particularly as it experiences a construction boom.
Officials now are ramping up efforts to dispose of the excess properties by selling the land or, if the parcel carries no value or shouldn’t be on the city’s rolls to begin with, transferring it to a different owner.
The city’s updated list of unneeded properties includes hundreds of vacant dirt and gravel lots, some of which have sat idle for a decade or longer with no planned use on the horizon. It also includes properties the city should have relinquished years ago.
Greta Rogers, a retired real-estate agent who lives in Ahwatukee Foothills, has complained about the city’s ownership of excess land for years. She said the city finally is making the right changes after unnecessarily holding empty properties for decades.
“The city has sat with this plethora of land since point of beginning and it’s just grown like mold,” Rogers told council members last week. “I’m glad we’re finally addressing this situation.”
The overhaul started about five months ago, with an order from the top.
City Manager Ed Zuercher directed his staff to thoroughly review Phoenix’s portfolio of about 5,500 properties last fall, as The Republic questioned city departments about their long-term ownership of vacant lots. The review, which isn’t complete, has already shown at least 656 parcels are excess and could be disposed of.
Before that, Phoenix pushed back against complaints that it was sitting on numerous properties it could sell.
In late 2015, the city had identified about 30 excess properties. Mary Vivion-Withrow, the city’s then-deputy finance director, said city departments had reviewed all of their parcels and the few dozen on the list were the bulk of the unneeded land.
“At this juncture, it’s not as if we have a large list of excess properties,” VivionWithrow said at the time.
Deputy City Manager Paul Blue, who led the recent review, said while the city knew some parcels were missing from the earlier list, others came as a surprise. He said the review team questioned departments about their reasons for holding land. They previously hadn’t done that type of analysis.
Blue and others outlined the results of the overhaul last week in a presentation to the City Council’s efficiency subcommittee. About four years ago, City Council members called for the city to sell unneeded properties, but the effort moved slowly.
The city also recently launched a new website showing all of its for-sale properties — something real-estate investors said was needed given the difficulties they have encountered inquiring about city land sales.
As of mid-March, Phoenix was in negotiations or under contract to sell 132 properties. It has about 38 other parcels listed for sale and plans to list 43 more in the near future, according to city officials.
But that’s just the beginning. The city is figuring out how best to dispose of 417 additional properties. And city officials still are reviewing land owned by the Aviation Department: The airport owns about 800 vacant lots, which it acquired by buying and demolishing homes near runways using federal money for noise remediation.
With airport land included, the city’s list of excess properties could top 1,500 parcels, or about a quarter of its total land holdings.
Blue said some properties added to the list of excess city land aren’t surprising because the city always knew they eventually would be sold. For instance, the city is undergoing a federal review process to dispose of the airport lots. The Housing Department also has a few hundred homes it bought to provide affordable housing during the recession but now plans to sell.
But Blue acknowledged the list of properties likely includes hundreds of parcels the city hadn’t realized it could sell.
Maricopa County Supervisor Bill Gates, who resigned from the City Council last year, helped lead the drive to sell excess city land when it started several years ago. He said the results of the latest review are what he and other leaders hoped to see.
Getting to the expanded list of excess city properties required an exhaustive review. Over the past five months, Blue and a team of experts examined satellite images of parcels and questioned department leaders about their holdings.
In some cases, Blue said, department leaders had good reasons to keep land, such as property where the city might want to build a fire station. The property could cost more later if the city had to buy it back.
But the city found other cases where departments were sitting on land they didn’t need, at least not anymore. City departments previously had broad authority to decide what land was labeled excess, which critics say created little incentive to divest.
Blue said once the review is complete, Phoenix will regularly evaluate its land ownership to ensure it doesn’t have to go through a similar ordeal.
Among the unneeded properties found in the internal review were:
• Two properties that the city owns but shouldn’t, according to Jami Spear, a city real-estate administrator. One is a water-infrastructure property that belongs to Glendale. The other is a road in Scottsdale.
• 131 parcels that should be dedicated as public roadways, a process that removes them from the assessor’s property-tax rolls.
• A boarded-up home near 27th Avenue and Van Buren Street. The home was bought using federal money for first-time buyer assistance, but the city foreclosed on the property in 2008. It has sat vacant since and the Housing Department has no plans to redevelop it.
The benefits of unloading properties are two-fold: The city brings in money that could help address its financial problems and alleviates complaints from residents.
Selling could generate millions, though the city faces limits on how it can use money from land bought with federal funding.
But the immediate proceeds are just one piece of the financial impact. For every lot the city has, someone isn’t paying property taxes. And the city spends hundreds of thousands of dollars per year to remove weeds and trash from vacant properties.
The city doesn’t have an estimate for how much it has spent to maintain vacant lots, but the number likely is in the millions .
The city now is preparing to sell many stand-alone properties, including some that have received criticism from neighbors.
In downtown Phoenix, the city will soon accept bids for a dirt lot on Fifth Avenue. The city has owned the lot, enclosed with a chain-link fence on which hangs a “No Trespassing” sign, for more than 14 years.
Jonathan Pring, owner of the Teapot coffee shop next door, complained that the lot is an “eyesore” that attracts vagrants and litter, hurting the curb appeal of the surrounding area. He said the city was tightlipped about plans for the parcel.
About a month ago, he said he got a call letting him know the city will sell it.
“Had I not been a squeaky wheel, I don’t know that it would have been done so quickly,” said Pring, who may buy the land.