Town's Land Deal Still On But At A Higher Price

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The Town of Payson, which has been negotiating with the state Land Department for 25.1 acres of state trust land, will have to spend at least $112,500 more than the land's appraised value to buy it.

The Land Department's Appeals Board agreed this month to sell the property near Payson Municipal Airport, which town officials want to use for airport expansion, for $40,000 an acre -- $6,000 an acre above the property's appraised value.

Although the Land Department's appraiser priced the property at $34,000 an acre, neighboring commercial property is selling for more than $40,000 an acre, Payson Town Manager Rich Underkofler said. The board adjusted the price of the state's land to bring it in line with neighboring property values.

If the Payson Town Council approves the new price, the state will sell the property to the highest bidder during a public auction this summer. The auction could drive the price even higher.

Town officials, however, are determined to acquire the property for the airport and said they will condemn the land if they are outbid.

"Anyone who buys the property will be buying a lawsuit," Underkofler said. "That's for certain."

The town, which has been cooperating with Phoenix Logistics, a high-tech manufacturing firm, to buy two adjoining parcels of state land off Airport Road, has secured a state grant for the 25.1-acre purchase. The appeals board rejected Phoenix Logistics' request to buy the other parcel, a nearby 13.5-acre tract of land. (See the related story on page 1A).

The town's grant, which was awarded through the Arizona Department of Transportation's Division of Aeronautics, is for $564,750 -- 90 percent of the $627,500 appraised value of the land. The town is responsible for the other 10 percent.

The base bid for the property is now $740,000.

The Town Council will have to dip into the town's general fund to pay the difference between the grant and the final bid price unless officials can convince ADOT to adjust the grant based on the real price of the property, Underkofler said.

The town will ask ADOT to re-evaluate the grant after the auction, he said, so there's a risk that the grant won't be readjusted and the town will have to pay the difference.

The trust land, which is south of the airport, is a key component of the town's Airport Master Plan, which calls for the realignment of Airport Road to the south.

"The airport's parallel taxiway is too close to the runway to meet the Federal Aviation Administration's new design standards," Underkofler said, "so we have to move everything south."

Over the next 20 years, town officials plan to move the road, the taxiway, several ramps and the fuel shack to the south. They also plan to add large maintenance and repair hangars, a flight tower, flight facilities for the fixed base operator, several maintenance buildings and a fire station to the site.

The town also is embarking on a four-stage road improvement project that will widen Airport Road to three lanes and add sidewalks and bike paths to the thoroughfare. That project will be funded primarily through state grants and development fees, Underkofler said. The first phase of the project, which is expected to begin this year, will widen Airport Road between Highway 87 and McLane Road.

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