It is the Land Department's responsibility, on behalf of the beneficiaries, to assure that all Trust land transactions are consistent with the State’s mandate to achieve the highest and best use of the land in order to maximize revenues to the Trust’s beneficiaries. The Trust cannot subsidize development for any purpose, no matter how commendable, at the expense of its beneficiaries.
Both the purchase and the commercial lease process is initiated by an application, completed by the applicant in consultation with Department staff, and filed with the Land Department. A Preliminary Application Conference with Real Estate Division staff is required prior to filing a purchase or long term lease application. Typically, lands intended for residential purposes are sold, where as lands intended for commercial uses are leased.
Commercial leases can have terms of either 10 years or less (“short term”) or over 10 years and up to 99 years (“long term”). Sales and long term commercial leases are acquired through the public auction process. All sales and commercial leases of State Trust Land must be approved by the Board of Appeals. The State Land Department is authorized to pay commissions to Arizona licensed real estate brokers as part of the auction process; see below.
The Land Department will review a purchase or lease application, taking into consideration at a minimum: the income potential to the Trust; proposed use; archaeology; hydrology; geology; entitlements; impact to adjacent State Trust Lands; availability of utilities / infrastructure; access; proximity to existing development; parcel size; and conformity with local jurisdiction regulations.
The complexity of a purchase or lease application is the determining factor in the length of time it takes to process the application. The estimated processing time may exceed one year, especially if the disposition must be auctioned. Due diligence is at the expense of the applicant, and for auctioned transactions, may possibly be reimbursed if the applicant is not the successful bidder. Please consult the side bar links for additional information regarding appraisal, planning and engineering, sales and leasing and rights of way on State Trust Land.
Sales & Leasing Section