Walmart / Annexation / Open Space

In addition to citizens paying the road infrastructure costs for Walmart and the purchase price for 4,000 acres of open space land, the citizens are contractually bound to pay the multi-million dollar infrastructure costs for the land not designated as open space under the Annexation Agreement.

At the beginning of the annexation process, it was believed that the 4,000 acres to be annexed into Cave Creek as open space was to be free or virtually free. This was possible because of proposed state land reform. However, when state land reform was defeated it became apparent that the land was not going to be “free;” that the Town would need to purchase the 4,000 acres.

Under Arizona law, the purchase of any state land has to go to competitive bid, i.e., state land auction. The Town Council is publicly projecting that the price for the 4,000 acres of open space land will be only $400 per acre, or a total of $1.6 million dollars. The city of Scottsdale recently bid $16,250.00 per acre, $6.5 million dollars total, for the purchase of 400 acres of open space at state land auction. In December, 2008, the city of Phoenix added to their preserved land and purchased 737.13 acres of RE-35 Single Family Residentially-zoned land at state land auction at a cost of $62,415.00 an acre, $46 million dollars total.

Using Scottsdale’s bid of $16,250.00 an acre, Cave Creek’s price for the 4,000 acres of open space would be $65 million dollars. If Cave Creek does not purchase the 4,000 acres of annexed land within twenty years of the date of the Annexation Agreement, the land reverts back to residential zoning of one home on each of the 4,000 acres to be sold by the State Land Department.

The Annexation Agreement states that the annexed land which is not designated as open space shall be developed. The Agreement contains provisions for developing resorts, etc., on the land not designated as open space. The Town is contractually bound under the Annexation Agreement to give developers credits or offsets for improvements they make when building these resorts, etc. The Development Fee Reimbursements section of the Annexation Agreement states: “The developer or owner is entitled to receive credits and or offsets for any development fee for the installation of any eligible public infrastructure improvements…”

While a town paying developer fees is a very uncommon practice, at the beginning of negotiations this was considered reasonable as the 4,000 acres were to be essentially “free.” However, after the loss of state land reform, and when it became apparent that the Town would have to purchase the 4,000 acres, the Town’s failure to re-negotiate this provision will prove costly to the Town.

All development increases costs to a town even if it’s left as open space because certain costs are mandated. In 2009 the Town paid the Maricopa County Sheriff’s Office an additional $252,252.00 to monitor and respond to calls concerning Spur Cross Conservation Area. The newly annexed open space area consists of 4,000 acres—nearly double the size of Spur Cross. The yearly cost for monitoring the additional 4,000 acres by MCSO should have been publicly addressed by the Council, as it is a cost that must be borne by citizens.

The present size of Cave Creek is approximately 30 sq. miles without the annexed land and 38.8 sq. miles with the annexed land. The annexed land constitutes one-fourth the size of the Town. Failure by the Town to re-negotiate the Development Fee Reimbursements section of the Annexation Agreement after the defeat of state land reform means that one-fourth of the Town will be developed without a developer paying their share of public buildings, infrastructure, open space, water and sewer.

Cave Creek citizens are to pay for Walmart’s infrastructure, the infrastructure on the land not designated as open space under the Annexation Agreement, as well as the purchase price for 4,000 acres of open space land.

How much development can Creekers afford?