Scottsdale City Council members seek new controls on land deals

The city of Scottsdale sold this property to Scottsdale Schools early this year for a little over $2 million, records show. (Independent Newsmedia/TerranceThornton)

The city of Scottsdale sold this property to Scottsdale Schools early this year for a little over $2 million, records show. (Independent Newsmedia/TerranceThornton)

Two Scottsdale City Council members are pursuing limitations on established city code amendments that allow city staff to decide when and how city-owned property held in trust is either sold, swapped or bought sometimes without a public auction as prescribed through ordinance.

David Smith

David Smith

Council members David Smith and Kathy Littlefield made a motion at the Aug. 25 Scottsdale City Council meeting to place limits on Scottsdale Revised City Code, Section 2-221, which defines how the municipality disposes of and uses taxpayer property.

This current code defines public auction as the most transparent process for disposing city-owned property because city leaders say the auction process provides assurances the property is sold to the highest bidder.

Section 2-221, however, contains five amendments — each with provisions for city council approval — that allows city staff to decide when it is “within the taxpayer’s best interest” to avoid a public auction, sell to an adjoining property owner or simply exchange the land.

A number of recent land deals made without a public auction has the two councilmembers questioning whether or not Scottsdale taxpayers are getting the best price for city-owned land. They believe new limits should be imposed to make sure the city gets the best price for its properties.

The council unanimously approved putting the topic on a future agenda. No date has yet been set for a discussion.

“How it came to my attention is we have had a few transactions of city-owned property using these exceptions over the past few years or so,” said Councilman Smith in a Sept. 1 phone interview.

Scottsdale City Council has avoided the sale of city-owned land through public auction a handful of times since fiscal year 2013-14, according to a city council agenda search.

Three notable instances include:

  • The January 2014 sale of 0.1 acres of land west of Scottsdale Road and north of Goldwater Boulevard to Pelcom LLC to for $241,725;
  • The May 2015 sale of an office complex at 7575 E. Main Street to the Scottsdale Unified School District for $2,022,000;
  • The May 2015 sale of 2.5 acres of land at the southwest corner of Bell Road and Thompson Peak Parkway to McDowell Mountain Retail LLC for $750,000.

Councilman Smith says the powers granted through amendments B(1) and B(5) used in each of the notable property sales over the last two years are those he seeks to change. While it might make sense to spend money on a public auction when it involves a small piece of land, it’s a different ball game when it involves a larger parcel, he says.

“Could the public auction process have realized more money for the taxpayers?” he asks.

Councilman Smith is not alleging any wrongdoing, but seeks to ensure Scottsdale taxpayers are getting the most bang for their buck.

“Those two amendments mean that we can avoid a public auction. My recommendation to my fellow colleagues on the council is that we put a limitation of land sale amount for these amendments,” he said.

Councilwoman Littlefield says recent land deals made without public auction have made her eager to explore new limitations on city-owned real estate deals.

“This was something that came up several times in the last year while I have been on council,” she said in a Sept. 1 phone interview.

Kathy Littlefield

Kathy Littlefield

“The exchange of land for buildings with the school district — it came to both of us as newbies on the block that there was no real ruling or policy in place to how public property, which is owned by the taxpayers, is sold.”

Councilwoman Littlefield feels greater council oversight of substantial land deals is warranted.

“Seems there is a lot of money involved,” she said. “I believe very strongly that we need to have some sort of policy or guidance for council to follow on how we are doing this.”

Councilwoman Littlefield says outside valuations do not always accurately depict market values — the market does.

“I am not saying that we shouldn’t be able to do this, but I think we should ensure before we do it, that we are getting the fair market value for what we are trading away. This is a common-sense business approach I think we should be looking at.”

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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