Campus Plans Make Big Strides Forward

ASU, Alliance put finishing touches on final IGA agreement

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Plans for a university in Payson have made big strides in the past week, according to Payson Mayor Kenny Evans.

Last week, backers finished drawing up the final “terms and conditions” for the key intergovernmental agreement with Arizona State University to build a 6,000-student campus here.

“We’re basically down to a single issue and I think we have a solution,” said Evans of the end game on the three-year effort to strike a deal with ASU.

“We’ve made great progress with the Forest Service, with the county, with ASU.”

Hailing his “best week in 18 months” Evans said he’s still hoping to have the campus open by the fall of 2013.

“It’s like putting a bullet train on the Durango to Silverton railroad line, but I think we can get it done,” said Evans.

Last week the Educational Alliance and the U.S. Forest Service settled on a timeline for the direct purchase of a 260-acre parcel south of Highway 260 near the location of the Payson Ranger Station.

The direct purchase agreement allows the Alliance to buy the property based on an appraisal, rather than open bidding.

The timeline would give the Alliance title to the property late next year, assuming no problems emerge as a result of an environmental assessment of the property expected to begin shortly.

“We have the timeline for the land sale. We have the intent to be a direct sale. We have the cost collection agreement — and all the documents agreed to. So we know what those timelines are, what the expectations are — how long it takes to complete this process,” said Evans.

Evans said the Alliance will hire the consulting firm Aztec to do an environmental assessment of the Forest Service site, mostly to look for potential environmental problems. The site contains no known endangered species or archaeological sites. The biggest complication is likely to be how to handle an area where the Forest Service maintained firefighting vehicles, since the soil might prove contaminated with motor oil.

“They’ll take a look at the maintenance areas and the fuel tanks, but so far we have no major issues.”

The vehicle maintenance area lies in the center of the 300-acre property. The Forest Service wants to keep about 60 acres for an expanded ranger station and visitors center.

In addition, the Gila County Board of Supervisors last week approved a sales agreement for 21 acres north of the highway that skirted objections raised by the Gila Community College Board.

That agreement should result in the Alliance taking ownership of the 21-acre parcel in January for a sales price of $600,000. The county recently gave the community college district about 32 acres, before agreeing to sell the remaining 21 acres to the Alliance.

Evans said the Alliance will now have to decide whether to start the first 1,000-student phase of the university north or south of the highway, since the county land sale got delayed and the Forest Service land sale got accelerated. However, the county land still offers the best chance of getting phase one open by the fall of 2013.

Even if the classrooms and dorms for phase one shift south of the highway, the Alliance can combine the 21 acres from the county with 67 acres of private land for a research park, incubation center and other facilities to support the university.

“We could look at things associated with the linkage between work force development and full academic activities,” said Evans. “The land will have a significant use to benefit the university and the community college.”

ASU and the Alliance have settled almost every significant issue in the plan to lease the university space at such a low rate that students would pay maybe one-half to two-thirds the normal tuition.

The key breakthrough came when the Alliance agreed to provide classrooms and offices at essentially no cost to ASU for the 1,000-student phase one, in return for ASU’s promise to share the cost of academic facilities for the remaining phases of the 6,000-student build-out population. The agreement essentially shifts to the Alliance the initial risk, since the project won’t add the additional classrooms, dorms and offices until the enrollment gains justify that expansion.

The Alliance has also reportedly agreed to share some of the revenue from the on-campus dorms, which will produce more income than any other part of the project.

Investors have promised up to $500 million for the campus, including perhaps $100 million in outright donations.

The Alliance and its financial partners have already spent several million on the project, drawing up plans, acquiring land, doing studies and collateralizing the pledges with financial guarantee, a key step that reassured ASU that investors have made a firm commitment.

The overall plan for the campus relies on spin-off developments to provide revenue to keep the cost of the campus itself as low as possible. Those spinoffs include a solar facility, a research park, an incubator center to convert faculty research into products and a 500-room convention hotel, that could host educational conferences for ASU, the largest public university in the country.

Evans said the details of the plan have continued to evolve, with backers improvising each time they face a problem.

Now, the Alliance appears likely to have 260 acres south of the highway and nearly 100 acres north of the highway, to accommodate the interlocking projects. Evans said he hopes that the community college and the university can cooperate to develop vocational programs that take advantage of those new businesses.

“We were thinking when we started negotiating that the county land would give us an 18-month head start, but those two timelines are coming together pretty rapidly. If we run into any more challenges, we may choose to put the whole campus south of the highway.”

Still, the progress in the past week makes “a nice Christmas present,” concluded Evans.

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