Minnesota-based Mortenson Co. purchased 217 acres of state land in northeast Phoenix for $136 million.Mortenson plans to develop a mixed-use corporate campus on the site.The sale proceeds will benefit Arizona’s K-12 schools, universities, and other state programs.State land in northeast Phoenix, where the now-defunct Arizona Coyotes once hoped to build a new arena, was sold to a Minnesota-based commercial developer for $136 million.In a bidding war that broke out at the Arizona State Land Department’s public auction last week, Mortenson Co. outbid rival developer Verde Investments for the 217-acre property near Scottsdale Road and Loop 101.With its newly acquired chunk of vacant land in a rapidly developing region of the Valley, Mortenson plans to build a mixed-use corporate campus. Doing so would add to the company’s expanding portfolio of office, hotel and industrial center projects in Arizona.After the auction, George Forristall, Mortenson’s vice president of Real Estate Development, didn’t have much else to share about the company’s plans for the site, other than to express elation for winning the bid.“We’re confident that the work underway is laying a strong foundation for a development that will enhance the community and support continued sustainable growth in this key corridor of the Phoenix metro area,” he wrote in an email.Here’s what we do know about this site:Why did the Coyotes want the land?Former Coyotes team owner Alex Meruelo had long eyed a 100-acre portion of the site located west of Scottsdale Road and north of Loop 101.The team didn’t have an official place to call home since it was bounced out of the Desert Diamond Arena in Glendale at the end of the NHL’s 2021 season.After playing for a couple of seasons in Tempe, the team’s hockey assets, including players, were sold to Ryan Smith, owner of the Utah Jazz basketball team, in April 2024.While Meruelo still owned the team’s trademark and intellectual property, he struck a deal with the NHL to give him an expansion team if he could build a suitable arena. He looked to do so by purchasing the Land Department’s vacant property, appraised for nearly $69 million.His plans, however, were foiled a year ago this month, when the department canceled the auction that was scheduled just days away.According to a Phoenix zoning administrator, the existing zoning on the land doesn’t allow for an arena. That meant Meruelo would have needed to obtain a special use permit for the development if he wanted the property.After the canceled auction, Meruelo left his role as team owner, ending the pursuit of an arena and nullifying the expansion team deal. The team has since been rebranded as the Utah Mammoth.What is the Phoenix property zoned for?According to an environmental site assessment, the existing zoning on the 217-acre land largely allows for ranch and farm residences.However, the site can also be used for planned community districts and commercial and mid-rise developments.A portion of the property is zoned for single- and multi-family housing.What does Mortenson plan to do with the property?After the Coyotes’ hopes for a new home were dashed last year, Mortenson applied to buy the land the Coyotes wanted, along with about 100 more acres on the north end of the site.The company told The Arizona Republic in April that it wanted to build a corporate and mixed-use campus.“Mortenson has strong interest in the vitality and appeal of North Phoenix, and we believe the area near Scottsdale Road and State Route 101 presents a great long-term opportunity for a corporate and mixed-use development,” a spokesperson for Mortenson wrote in an email.The area around the site is already undergoing a massive transformation with new developments. For the company, Forristall said last week, that presents a “prime opportunity” for its planned development.Who challenged Mortenson’s bid at auction?Mortenson’s application initiated the June 20 auction, which had a starting bid price of $110 million.It also sparked interest from Verde Investments, the development firm owned by billionaire Ernest Garcia II, the richest man in Arizona. Verde recently acquired the last vacant portion of the Fiesta Mall in Mesa. There, the company is transforming the property into a sprawling mixed-use development called Fiesta Redefined.With dozens of people attending the auction, Mortenson and Verde launched into a bidding war, trading counteroffers for the site.Ultimately, Mortenson outbid Verde with its $136 million offer.As required under Arizona law, funds the department collects from land sales directly benefit K-12 public schools, universities and other programs such as the state hospital.Shawn Raymundo covers Phoenix and Scottsdale. Reach him atsraymundo@gannett.com or follow him on X @ShawnzyTsunami.Republie Reporter Corina Vanek contributed to this story.
See the full article on Arizona zoning regulations, or, read more Arizona real estate investing news. It’s up to you!