Phoenix Could Offer Developer $1 Annual Lease For 100 Years To Transform Landfill

By Christina Estes
Published: Wednesday, September 23, 2020 - 5:00pm
Updated: Thursday, September 24, 2020 - 9:24am

Arizona Fresh Holdings
Plans for the 156-acre site between Seventh and 16th streets at Elwood Street involve several phases.

Phoenix could soon lease more than 100 acres of city-owned land to a developer for just a dollar a year.

Under the terms presented to the city’s Economic Development Subcommittee on Wednesday, Arizona Fresh Holdings would pay a dollar a year for 100 years. In exchange, the company pledges to transform a former landfill in south Phoenix into a food innovation center and build a public park. 

Plans for the 156-acre site between Seventh and 16th streets at Elwood Street involve several phases. Phoenix Economic Development Director Chris Mackay said the first phase would include a year-round farmer’s market open to the public and a 200,000-square-foot distribution center for international and local wholesalers. 

“So it could be something like a large grocery store that comes in to buy their produce for a week but it could also be one of our local restaurants that’s looking for tomatoes for this week’s salads,” she said. 

Arizona Fresh Holdings
The development's first phase would include a year-round farmer’s market open to the public and a 200,000-square-foot distribution center for international and local wholesalers.

The first phase also calls for the developer to build a 20-acre city park under the guidance of Phoenix Parks Department and help with ongoing maintenance costs. Mackay said the development of the park must be of greater value than the broker’s estimate. 

“In other words, they are paying more than fair market value of the land when including the funding and construction of a public park, and then they will pay an annual amount to the Parks Department for ongoing operations and maintenance for 100 years,” she said. “The City will receive significantly more than the value of the land over 100 years.”

Mackay said the developer will also build a public amphitheater and open space during phase one.

“When we were out in the community that was the area we heard the most that the community was interested in, a space for their own festivals and outdoor entertainment,” she said. 

Future phases include a food research center, test fields, startup incubator and office park. 

The site boundaries are Seventh Street on the west, 16th Street on the east, Elwood on the south and the Salt River on the north. Approximately 103 acres operated as a Phoenix solid waste landfill between 1971 and 1981. A 20-acre city park was located on a non-landfill portion but it closed in 2012.

Finding someone to redevelop the land has been challenging. In 1995, the city issued a request for proposal (RFP) that was terminated in 2004. In 2005, another RFP was issued and two proposals were received but both were disqualified for not meeting the requirements. In 2019, two more proposals were received and disqualified again for failing to meet the RFP requirements.

“The community made it very clear that they were not interested in seeing a traditional industrial development, an industrial park, happen on this particular site and I promised the community we would not bring anything forward to them that met that requirement,” Mackay said about the 2019 proposals. 

In late 2019, she suggested to the City Council that it would be more effective to find redevelopers by offering it as a public lease opportunity rather than RFP. The change would allow various city departments to speak to interested parties about their proposals before they submitted offers. 

Mackay said the city received five offers and chose Arizona Fresh because it was able to meet more of the community’s request, including a mixed-use project, shared use path along the northern border and trail and recreational elements for public use.

According to an study by Elliott D. Pollack and Company, the project will support 1,460 construction-related jobs and, at full build-out, support approximately 1,500 full and part-time jobs. The annual economic impact of operations is estimated at $3.5 million and includes primary impacts of various taxes and secondary impacts of employee spending.

The City Council is expected to vote on the deal Oct. 7. 

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