HORIZON 4
The Handoff to the Private Sector Mid-1996 to Mid-2002
(opposite, left) David Butterfield on the right, leading a community event in one of his developments. (opposite, right) David Butterfield, first developer of Civano
In February 1996, the City issued a Request for Proposal solicitation to qualify for and participate in the auction to be held in June for the 818 acres set aside for Civano. Only two companies replied: David Butterfield’s Trust for Sustainable Development (TFSD) and Arizona Public Service, one of the three large Arizona power generation companies. As part of any Arizona State Land Department sale, an independent appraiser must set the minimum land value for the public bid. As one can imagine, this appraisal was subject to considerable debate. On the one hand, the State Land Department sought the highest justifiable estimate. On the other, given the estimated $9 million financing gap in the then project pro forma, the City hoped to have the State Land Department establish the lowest reasonable valuation. Laswick worked with the appraiser to ensure that he fully understood the requirements of the IMPACT Standards. As a measure of just how ambitious the development requirements for Civano seemed to a conventional real estate expert in 1996, the appraiser asked Laswick if he realized that “it would be possible to assign the land a negative value.” The appraiser’s reaction shows the institutional bias against any development prospect that did not conform to standard sprawl development. An important corollary point is that, in the estimation of this experienced appraiser, innovative prototypes like Civano would require some form of subsidy to achieve financial viability. There is also a “road not taken” story buried in the public bidding process. John Wesley Miller relates that David Case, who will be introduced in the next chapter, first approached Miller and Arizona Public Service about forming a development team to go after the Civano RFP. When APS could not come to terms with the City on pre-bid conditions, Miller made Case aware of Butterfield, and the two joined forces, but with Butterfield remaining in charge. The departure of APS left Butterfield/Case as the only bidder, allowing them to purchase the property at the minimum appraised value: $2.3 million. One can speculate on just how different Civano might have been if APS had been one of the development partners. The financial issues that plagued Civano almost certainly might not have happened. With Butterfield, a strong proponent of New Urbanism, as a partner, one can speculate that Civano could have happened with New Urbanist planning and design, but far better funded. APS’s interest possibly reflects that, in 1996, most large utilities were supporters of “alternative energy,” especially solar. It was an infinitesimally small factor in energy generation, but it was good public relations. The public loved solar. As the price of alternative generation—especially wind and solar— came down over the next two decades, utilities began to see a threat to their monopolies on energy generation and distribution. APS is now considered to be a ferocious opponent of renewables—especially when owned by private
users—and has been exposed financing the campaigns of candidates for the public utility commission who would support their position. With a developer chosen, they and the City reviewed final revisions to the Development Agreement. Once terms had been agreed upon, the Agreement went to the Mayor and City Council for approval. That approval was far from certain. While the Council was quite progressive, two of its six members, who were ardent environmentalists, did not support the proposed Agreement. The primary reasons were its distance from the central city with its employment base, and Civano’s middle-income market focus. The fact that there was no open land of Civano’s scale any closer to established employment centers, and most jobs lay in a band about midway between downtown and the site helped, but did not erase the “distance from jobs” concern. The commitment to 20% affordable houses over the life of the project failed to sway one dissenter. After some tense debate, the motion to approve the Development Agreement and certify Butterfield/Case as the developer narrowly passed 4-3. The sale of the land at the minimum “fair market” value and the fact that no bidding pushed it higher was significant. The winning bid equated to roughly $2,800/acre, or $4,000/acre of buildable land, if the mandated 30% open space set-aside is taken into account. At that time, buildable raw land on Tucson’s far east side was valued at roughly $6,000–$8,000 an acre, resulting in an effective discount of at least $1.15 million to the developer, a discount that could be directly attributable to the development requirements for Civano. This discount was seen as another way that the financial challenges that had been implicit in Civano’s planning from its conception were gradually being overcome. Fifteen years after the Kessler memo first outlined the ideas that should be included in what would become the Tucson Solar Village, all the components were in place to begin making its evolved descendant, Civano, a reality. Land; a clear Development Agreement assigning public and private responsibilities; professional studies showing that there should be a strong market for Civano in the Tucson region; a committed private-sector developer; two exceptional City officials to help the project’s passage through the regulatory and entitlement process: all these were in place. A public planning workshop, or charrette, was scheduled for September. Momentum could be felt, and optimism abounded. And yet, not quite six years later, the last two neighborhoods of the project would be broken away, and the IMPACT Standards softened. All this, even though Neighborhood One, fully incorporating New Urbanism and on its way to meeting the IMPACT Standards, was showing sustained sales and growing success. A new builder/developer, Pulte Homes, would embrace sprawl production housing standards for Neighborhoods Two and Three. During those
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