Arizona's Citizens Can Work Together to Move Arizona Forward

Arizona has critical growth related issues that must be addressed on a statewide level. Our unique environment makes it particularly important to address these issues. Yet, Arizona does not currently have effective statewide planning measures and it is unlikely the legislature will address several important statewide growth-related issues. However, this lack of support and acknowledgement from the legislature does not have to result in poor air quality, water shortages, traffic congestion, distressed natural systems and endless sprawl within our state. Arizona's municipalities, counties, tribes, corporations and non-profit organizations can work together to effectively address statewide issues to enhance our quality of life and our economic competiveness.
Unlike other states that have recently begun regional visioning exercises, such as Envision Utah (http://envisionutah.org/) or the Colorado Center for Sustainable Urbanism (http://www.ucdenver.edu/academics/colleges/ArchitecturePlanning/discover/centers/SustainableUrbanism/Pages/CenterforSustainableUrbanism.aspx), Arizona's corporations, non-profit groups, tribes, state agencies, counties and municipalities have already conducted several regional planning exercises and produced volumes of sophisticated and thoughtful materials that address significant areas of our state. Moreover, the sophistication of these envisioning exercises and the materials produced as a result of those exercises, such as the recently published Pima County's "Protecting Our Land, Water and Heritage" (http://www.pima.gov/cmo/admin/Reports/ConservationReport/), rival those of other states and regions. But, Arizona needs a mechanism to convene key stakeholders to identify and prioritize the most pressing growth-related issues facing our state. Further, once those issues are identified and prioritized, the stakeholders need to develop a support system to ensure the successful implementation of visioning and planning documents, including the wealth of existing visioning tools. Past failed attempts show the success of these visioning tools and planning documents often are reliant upon a political and financial commitment from a sponsoring entity that can effectively address state issues and mobilize a committed, active and educated group.

Valley Forward recognizes Arizona is at a critical juncture and it is important an entity be formed to help the diverse interests within the state find common ground to move Arizona forward on economic, social and environmental issues. This entity must help existing stakeholder groups within the state come together to recognize, prioritize and address critical growth related state issues. Accordingly, Valley Forward has recently committed substantial funding and staff resources to help initiate a coordinated statewide coalition of stakeholder groups (including municipalities, counties, corporations, tribes and non-profits) to facilitate inter-jurisdictional dialogue. This dialogue is necessary to develop stronger connections among existing groups so that we can effectively address growth-related issues in our state. Together these organized stakeholder groups can provide a powerful voice that can mobilize to address statewide issues as well as provide support for existing and future local initiatives.
Membership information for Arizona Forward can be found at: http://www.valleyforward.org/about/78/

Arizona and Valley of the Sun Multi-Use Trails

I'm taking a break from traditional real estate news and information to take a look at the amenities that draw so many people to Arizona to buy homes and visit our resorts (and please do buy some homes in Arizona and visit the state's resorts).   After years of planning, constructing and linking miles and miles of trails, many well known (and some lesser known) trails are near completion within the state.  These trail systems offer unique hiking, equestrian, cycling or off-road vehicle experiences to visitors and residents of Arizona.  Some more significant trails include:

Regional: The Great Western Trail (Arizona, Utah, Idaho, Wyoming and Montana). This 4,455 mile trail is intended for use by motorized and non-motorized users. Eventually this trail will connect Mexico with Canada via the United States route. The Arizona section of this trail consists of back country roads that run from Mexico to Utah. Several sections of the Arizona trail are still under consideration or construction. Maps and detailed information about this trail can be found at: http://www.gwt.org/.

State: The Arizona Trail. When complete, this trail will include 807 miles of trail for use by hikers, mountain bicyclists, trail runners, cross-country skiers and equestrians. The trail runs from the southern border to the northern border of the state and requires only 35 miles of improvements to be complete. Maps and detailed information about this trail can be found at: http://www.aztrail.org/.

County: The Maricopa Trail and the Valley's Pedestrian Freeway. The Maricopa Trail is a 240 mile multi-use (non-motorized) trail that links open space projects and trail systems (including 9 regional parks) into one large loop around Maricopa County. This trail is supplemented by the Valley's Pedestrian Freeway conceived by Valley Forward to provide for interconnectivity among trails and parks within Maricopa County. The network of existing trails within Maricopa County is extensive, but there's still plenty of opportunity to help complete this network. Maps and information about how to help complete this trail system can be found at: http://www.valleyforward.org/issues/52/.

Local and Accessible: The Rio Salado Habitat Restoration Area. There are several local trails throughout the Valley of the Sun, but one that might be overlooked is the five mile stretch of the Salt River located just south of downtown Phoenix. Several paved trails easily accessed from ample parking lots are available throughout the Rio Salado Habitat Restoration Area. This accessible trail system offers unique bird watching and site seeing opportunities. The Rio Salado Habitat Restoration Area is another Valley Forward project that provides unique educational opportunities about varied habitats within the Valley. Maps and information can be found at: http://phoenix.gov/riosalado.

Organizations like Valley Forward have been instrumental in designing, organizing, constructing and maintaining trail systems within Maricopa County. There are several volunteer opportunities to help complete and maintain the existing, extensive network of trails started and supported by Valley Forward. These volunteer efforts are local, convenient and rewarding. Find out more about Valley Forward and volunteer opportunities at http://www.valleyforward.org/.  Get outside and enjoy Arizona!

City of Phoenix Rezoning Application Trends

The City of Phoenix Planning Department recently presented an excellent Continuing Legal Education program to the Real Estate Section of the Arizona Bar Association. The presenters included some interesting slides at the end of their program showing trends in the number of zoning related applications submitted to the department on an annual basis. This first slide shows the number of applications submitted each year for the last 5 years for general plan amendments, rezonings, special permits and planning hearing officer requests. The chart shows a chilling, steep decline in zoning application filings for the last 5 years:

The picture isn't much better for zoning adjustment cases (use permits and variances) for the last five years:

Some good news: the chart below shows application submittal trends for the last 50 years and the chart always moves upward after a period of decline (to be expected, of course). You'll likely note a spike in rezoning applications in 1960 (largely thanks to the widespread use of central air conditioning), a spike in the mid 1980's (the last economic boom that ended with the Savings and Loans crisis in the late 1980's) and a dip in applications for the last significant recession in the early 1990's. The chart trends upward after the early 1990's recession until we enter this most recent recessionary period. As of the end of May, the City of Phoenix Planning Department had a grand total of twelve rezoning applications for 2010. That's a terrifying number. Let's hope the chart will trend upward again very soon.

Arizona Subdivision Law: A Refresher

Recent foreclosure activity, distressed property sales and quick due diligence reviews conducted in association with fire sales have resulted in unintended violations of subdivision regulations for several properties in Arizona. Sometimes the discovery of such a violation isn't made until a building permit or other approval is requested from a jurisdiction. At that point, it may be too late to correct the violation in a cost effective manner. Thus, it seems a refresher course on Arizona subdivision regulations is in order.

Jurisdiction

Municipalities, counties and the state all regulate subdivisions. Thus, you must first determine which regulations are applicable to a particular parcel of land. If the parcel is located within a municipal jurisdiction, the municipality will regulate the subdivision or platting of the parcel pursuant to powers granted to the municipality by A.R.S. § 9-463, et. seq. If the parcel is located within a county, the county will regulate the subdivision or platting of the parcel pursuant to powers granted to the county by A.R.S. § 11-806, et. Seq. Finally, dependent on the number of lots created and the proposed use for those lots, the Arizona Department of Real Estate may regulate the sale of any subdivided property pursuant to A.R.S. § 32-2181.

Municipalities

Absent certain specific circumstances, a plat is required for land located within a municipality that is divided into four or more lots. Municipalities may also regulate lot splits if land 2.5 acres or less in size is divided into 2 or 3 lots. A.R.S. § 9-463.03 states it is unlawful to sell or lease any part of a subdivision located within a municipality. Failure to comply with municipal subdivision regulations could result in a requirement that the improvements on the property be removed or modified.

Counties

A plat is required for parcels located within a county that are divided into six or more lots. Unlike municipalities, lots or parcels 36 acres or more in area are generally excluded from county subdivision regulations. Counties also have limited review rights for lot splits consisting of land divided into five or fewer lots. Failure to comply with county subdivision regulations could also result in a requirement that the improvements be removed or modified.

Arizona Department of Real Estate

In addition to regulations enforced by local jurisdictions, the Sate of Arizona requires certain disclosure statements (for example, public reports) and adherence to other regulations for the sale of residential lots. Similar to county regulations, these state regulations apply if the subdivision contains six or more lots, parcels or fractional interests. If a developer fails to comply with the state regulations buyers of the developer's residential properties may be able to rescind sales of properties within three years of signing the purchase agreement and the developer may be exposed to penalties.

A Few Parting Thoughts

Don't forget new lot lines may be created when property is transferred to a new owner. These new lot lines may result in violations associated with building setbacks, signage, parking, lot coverage, access and required lot sizes. The creation of lot line can result in penalties, violations, rescinded transactions and costly retroactive compliance.

Due Diligence Land Mines: Incorrect Zoning Maps

The current real estate market is dominated by foreclosures, auctions and quick sales. There's little or no due diligence done on real estate "transactions" these days and, worse, many buyers (and bidders) rely on incorrect due diligence findings discovered during quick due diligence reviews. There are numerous due diligence traps, but one of the more common is to simply consult a local zoning map to determine zoning entitlements applicable to a property only to later discover the zoning map is incorrect.

Why zoning maps show incorrect zoning districts designations for properties

Some municipalities and counties are simply behind on updating their zoning maps. The maps still show old zoning districts for several properties. You must research the public records and zoning files to determine the correct, applicable zoning district for a property. Also, some municipalities and counties had, or have, policies that zoning maps are not updated or modified until all zoning stipulations of approval have been satisfied or until site plan approval has been obtained.

The importance of stipulations of approval

Stipulations are frequently attached to approvals to rezone property. Stipulations often require landscaping, screening and/or right of way exactions beyond that required by the local zoning code. Another very popular stipulation is to require that a site be built in conformance with an approved site plan. Typically, stipulations can only be modified or removed via a public hearing process.

Zoning verification letters

Zoning verification letters are often required by lenders, but developers are cautioned to not rely on these letters. Zoning verification letters often provide incorrect information or fail to include important information.

Solar Energy: So Much Potential, So Many Obstacles

We've all been reading a lot about solar energy power plants in Arizona for several months. It's an exciting industry with a lot of potential. Several companies have shown an interest in developing solar energy power plants in the sunny state of Arizona and the future looks bright for this industry. So, why haven't we seen many solar project completions in Arizona? Well, it seems solar projects have to address several development issues that can delay or kill solar projects, particularly projects designed to put energy on the existing grid. Some of the issues (and obstacles) facing solar power plants include:

If you produce it, they will buy? Some solar companies fail to address the most basic of issues facing solar power plants: finding a buyer of their energy production. Arizona essentially has two realistic purchasers of significant megawatts: Arizona Public Service (APS) and Salt River Project (SRP). Of course, some solar projects will be developed in Arizona and sell power to Southern California Edison (SCE) or Pacific Gas and Electric (PG&E) but SCE and PG&E seem to have all the solar power they want to purchase for sometime. If a solar company hasn't first talked to APS, SRP, SCE or PG&E and secured a reasonable assurance of an agreement to purchase power, it's unlikely the solar project will be successful. Several solar companies have learned the hard way that you need to secure a purchase agreement, or reasonable assurances of a purchase agreement, from APS or SRP prior to expending any significant effort on the development issues associated with a solar power plant.

Location, location, location. It's the golden rule of real estate, yet several solar projects have failed to consider one of the most important location decisions relevant to a solar plant: the power plant must be located a reasonable (i.e. economical) distance from a power delivery point. If a substation is located miles from the solar facility or the nearest substation is at capacity and doesn't have room (or the ability) to expand, an otherwise perfect location for the development of a solar project becomes unworkable. It's prudent to place this issue at the top of the list of required criteria for selection of a development site.Where's the money? We are all waiting for our friendly bankers to open the coffers for even the most well established developments and proposed developments. Solar projects face especially high financing hurdles in this market. A lack of financing kills several solar projects. Although the promise of stimulus funds and government loan guarantees to obtain construction financing is enticing, these funds and guarantees are often very slow to come and funds and guarantees are not so easily obtained. The most successful solar project developers have managed to find significant funds from private investors.

The Great Land Grab. Solar projects tend to require a lot of land. In bad economic times, it's been relatively easy for solar companies to tie up private land for several months while the solar company conducts its due diligence. But there's only so much private land that is workable and available for solar projects and hopefully the market will soon turn and private land owners won't be so willing to enter into agreements with long due diligence periods. Thus, solar companies have to consider alternative owners for their potential development sites. These owners include the Bureau of Land Management (BLM), the Arizona State Land Department (ASLD) and Indian reservations. Indian reservations, ASLD and BLM all provide excellent opportunities for long term leases of large expansions of land offering excellent development opportunities. However, very few solar companies (or law firms) have any significant experience working with the BLM, ASLD or Indian reservations. It is very important to include as a member of the solar development team a person with a lot of experience dealing with these jurisdictions or the development process will be long and painful.

Simon, may I? If a solar project manages to get past the initial hurdles of development discussed above and a particular site seems to meet development needs (adequate water, access to sunlight, adequate vehicular access, etc.), then the project managers can turn to permitting issues. A solar power plant will require various environmental, utility and zoning and land use approvals prior to construction and operation. The good news is these approvals seem to be easier and easier to obtain, but they still require a lot of time and it's critical to have a team that knows which approvals make the most sense for the project and the best approach to obtain those approvals.

Incentives and Competition. Of course one of the biggest contributing factors to the lack of solar projects in Arizona is the lack of incentives available to solar projects within the state. Other states (New Mexico, in particular) offer great financial and other incentives for solar projects. The incentives offered by surrounding, competing states can make it very difficult for Arizona to compete for new solar projects.

This entry addresses some of the bigger picture issues facing solar companies. There's also plenty of good news for the solar industry. The future looks very bright for solar power and with some patience and the right team, a solar project can be quite successful and have a great impact on the future of our planet.