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We Shouldn’t Rush to Sell State Trust Land

16 September 2009  

Representative Lucy Mason discusses the issue of selling State Trust land.

 

lucystatetrustlandI read with interest various news articles advancing the idea that Arizona dispose of its State Trust lands in order to fill the current budget gap. State Trust land is among the most valuable assets Arizona has, and there are a few things to know before we engage in a statewide “fire sale” of it.

Set aside for a moment the issue of whether it would be wise to try to sell any land in this economy, it is important to acknowledge that such a liquidation of Trust land would be legally impossible absent both a voter-approved change in the Arizona Constitution and AN ACT OF CONGRESS! Realistically, this proposal offers NO relief for the current budget crisis.

Arizona’s State Trust lands, which were acquired from the federal government, were placed in a “perpetual trust” so they could be sold when the market demand pushed prices to their peak. The prohibition against wholesaling state land required each parcel to be sold to the “highest and best bidder at a public auction,” was first imposed by Congress in Arizona’s Enabling Act.

Under both federal and state law, Arizona Trust lands must be sold at “true value” based on appraisal in order to make money for Trust beneficiaries. The most significant beneficiaries are the state’s K-12 public schools, who own 87 percent of the Trust lands. Other beneficiaries include the School for the Deaf and Blind, the State Hospital, the Miner’s Hospital, the Pioneer’s Home, and, of course, the three Universities. It would not only be a violation of the Federal Enabling Act, the Arizona Constitution, and Arizona statutes to conduct a proposed fire sale but fool hearty to risk shortchanging these beneficiaries.

Further, it is a well-settled fact that unplanned, unimproved land fetches the lowest price. Almost all of Arizona’s State Trust land falls squarely into that category. However, each year a few thousand acres can be planned, then leased or sold at prices that reflect enhanced values.

A real world example is the Desert Ridge property in Phoenix, north of Highway 101 around Tatum Boulevard. About 30 years ago, it was suggested that, that land be sold for about a thousand dollars an acre. Supporters cited the land’s lack of desirability due to location. It was, after all, pasture land “out in the middle of nowhere.” Meanwhile, the City of Phoenix grew and eventually annexed that land. A freeway was built, utilities arrived, and uses were designated. This proved to be truly lucrative for the beneficiaries. In recent years, some of that land sold for up to $1 million per acre. Nowhere is the axiom, “timing is everything” more true than with the sale of land.

Again, Arizona’s Trust land was intentionally placed into a perpetual Trust. This means that public schools and all the other beneficiaries are entitled to wait until the time is right to sell each parcel. That was what Congress intended, and that is what the framers of Arizona’s Constitution intended. Let’s honor their intent, and not rush to sell out State Trust Land through a hasty lack of vision or panic driven precedence setting policy.

 

Representative Lucy Mason is the Chair of the House Water and Energy Committee and represents District 1. She can be reached at 602-926-5874 or via email at lmason@azleg.gov.

Arizona House of Representatives

1700 West Washington, Suite H • Phoenix, AZ 85007-2844

Phone: (602) 926-5874 • FAX: (602) 417-3001

 

Here is a partial map of the State Trust Land in and around Prescott, from the Arizona Sate Land Department. This includes both leased and unleased parcels. The turquoise areas are State Trust Land parcels.

prescott_statetrustland