NORTHEAST VALLEY – Westcor could be competing with at least two other major developers for 112 acres of state trust land that it has long targeted for its Palisene mixed-use project, said Arizona State Land Commissioner Mark Winklman.
The Thomas J. Klutznick Co. and DMB Associates are showing interest in the land northwest of Scottsdale Road and Loop 101, Winkleman said.
Daniel Klutznick, vice president of the Klutznick firm, said his company is interested in any "mixed-use" land the state brings to auction.
"We’ve been involved in the Northeast Valley of Phoenix for more than 20 years, and we are committed to this community. With what we already have under development, Paradise Ridge North is a natural expansion of our plans and vision for the area."
Karrin Taylor, a DMB vice president, said Tuesday that DMB has an interest in how the property is developed, but it is unclear if they will bid on it.
An auction for a 99-year lease of the site is likely in late September.
"This is going to set the stage for subsequent development" or the larger Paradise Ridge area that includes 2,400 acres of state trust land, Winkleman said.
The Arizona State Land Department has valued the 112 acres at $32 million. But the winning bidder would also have to commit to $67 million in expenditures for roads, utilities and drainage improvements.
Over the next three to five years, Westcor plans to build a mixed-use project called Palisene. It would include 1 million square feet of retail, dining, offices and condominiums in buildings up to about 17 stories.
That project would compete with CityNorth, which Klutznick is developing at 56th Street and Loop 101, and One Scottsdale, the planned DMB project northeast of Scottsdale Road and Loop 101. Dial Corp. is under way on its new headquarters within One Scottsdale.
Westcor, a subsidiary of Macerich, has a bidding advantage because it has a right of first refusal should it not be the winning bidder when the auction closes, Winkleman said.
Under an outdated bidding system that has been grandfathered in for this parcel of state land, Westcor can match the top bid.
The winning bidder would then have one more bid and Westcor would have the option of matching that bid as well, the land commissioner said.
That right of first refusal could scare off some bidders, Winkleman said, adding that a number of national developers showed interest in the site during a shopping center conference he attended in May in Las Vegas.
Developers at the fall auction will be required to bring a deposit check of $10 million to bid. That deposit includes the first-year rent of $300,000.
Last month, Scottsdale Vistella LLC bid the minimum $68.5million for a 99-year lease of 124 acres northeast of Bell Road and Loop 101.
That is $552,419 per acre but does not include infrastructure costs.
The Palisene parcel at a combined $99 million for the land and infrastructure improvements is priced at $883,929 per acre.
The 112-acre site is on the Phoenix side of Scottsdale Road, about a quarter mile north of Loop 101, and extends north to Thompson Peak Parkway.
Westcor and Klutznick officials were unavailable for comment.
Peter Corbett
The Arizona Republic
