Peoria Sets Sights on 8,300 Acres of State-Owned Land. Here’s What Could be Coming

Peoria is eyeing more than 8,300 acres of state-owned land for future growth as it charts a path toward becoming a hub in the semiconductor and defense industries.

With that goal in mind, city officials are working with the Arizona State Land Department to make two desert areas in northern Peoria available for auction to prospective commercial and residential developers.

The first swath, which the city refers to as the North Peoria Gateway, comprises roughly 1,600 acres. It’s located along Loop 303, roughly north of Happy Valley Road and adjacent to the southern portion of the Vistancia master-planned community.

The remaining 6,700 acres largely follow Lake Pleasant Parkway up from just south of Loop 303 to State Route 74.

That larger section is called the Peoria Innovation Core and it’s where officials want to create an “economic engine” for the city.

To get the engine running, the city is interested in purchasing 500 acres of that undeveloped State Trust land where it could build a municipal airport that rivals the Scottsdale Airpark.

Peoria plans to earmark nearly $5 million in its proposed Fiscal Year 2025 budget toward the purchase of the land, located around State Route 74 and Lake Pleasant Parkway.

The city’s efforts to unlock the undeveloped land come at a time when tech companies — namely in microchip manufacturing and data centers — have not only found homes in Arizona but have thrived.

Peoria is looking to capitalize on that success now that Amkor Technology Inc. is building its $2 billion semiconductor testing and packaging plant on 56 acres of the city’s northern district.

The plant is also just a short drive along the Loop 303 from the Taiwan Semiconductor Manufacturing Co.’s $65 billion complex in north Phoenix.

“This area of Peoria, and for that matter, this area of Arizona, truly has the potential to drive major economic growth and be the future hub for the semiconductor and defense industries,” Peoria Mayor Jason Beck said at his State of the City address last week.

What does this available land do for Peoria, state and how much is it worth?

Of Peoria’s remaining vacant property within city limits, the State Land Department owns about 75% of it.

“Until that land is made available through state auction, it just sits dormant as desert,” said Deputy City Manager Mike Faust.

Peoria, in partnership with the State Land Department, is working on making those desert areas available for major development. To do so, the city has initiated changes to Peoria’s 2040 General Plan, a municipality’s road map for long-term growth.

The city anticipates Peoria leaders to approve the updated General Plan this September after holding a series of public meetings over the coming months.

Through a joint consulting team, the city and the department are working to first zone the 1,621 acres that comprise the North Peoria Gateway.

The area is anticipated to welcome a mix of both commercial and residential projects. It will also sit just south of the Vistancia, Lake Pleasant Heights and Saddleback Heights subdivisions, which can collectively accommodate 30,000 residential units when fully built out.

By October, the North Peoria Gateway should be zoned, allowing the State Land Department to auction off parcels of the area to bidders, Faust said.

Asked how much the vacant areas are worth, Faust pointed to TSMC’s acquisition of state land as an example of what the surrounding properties could go for.

In December 2020, TSMC paid $89 million for 1,128 acres of nearby land in north Phoenix.

More than 2,340 acres of State Trust Land at the southwest corner of Interstate 17 and State Route 74 and the northwest corner of I-17 and Loop 303 will be up for auction on May 29. The starting bid is $56.28 million.

And a roughly 8-acre site on the southwest corner of I-17 and Happy Valley is set for auction on June 13, with a starting bid price of $2.94 million.

With discussions over the land still in its early stages, there have not been any appraisals yet, according to Lynn Córdova, the State Land Department’s public information officer.

Under Arizona law, the sale of State Trust lands benefits K-12 public schools, universities and other programs like the state hospital.

The State Land Department’s sale of 8,300 acres in Peoria could provide $3 billion toward educational programs, according to Beck.

How does this airport fit into Peoria’s future?

As for the Innovation Core, the city is still working with the land department on a development agreement to guide how they unlock those 6,700 acres.

“How does that land get zoned? What will the land uses be? How will the land be developed and how will parcels come to auction? So those details are still at work,” Faust said, later adding, “We’re hopeful that that can be done in the next couple of weeks or a month or two at the most.”

When that land’s parcels go to auction, the city intends to bid on a 500-acre portion, near the shuttered Pleasant Valley Airport. If all goes according to the city’s plans, it will use nearly half of that land for its airpark, while the rest goes toward commercial and industrial development.

Beck has staunchly supported an airpark, believing it to be a “revenue-generating machine.” He’s compared its potential to the Scottsdale Airpark, which has reportedly generated $10 billion in economic benefits for the east Valley city.

“I just want a portion of that here in Peoria,” Beck said at the council’s March 28 budget workshop meeting.

The comment came after Councilmember Brad Shafer asked city staff questions about the city’s funding for an airport that’s only been proposed and hasn’t yet received public input.

The city, Beck said, was “obviously, very clearly” committed to gaining the public’s thoughts on the airport.

“It is time to wake up and see what we’re actually trying to accomplish because this is a giant deal not only for the city of Peoria and its residents and the future tax base of this city, but also state education,” he said.

This fiscal year, the city budgeted $500,000 for an airport feasibility study, one of four reports being conducted on the airpark. The city tapped airport consulting firm Coffman Associates for the job.

Additionally, $82 million in capital improvement funds were earmarked in the Fiscal Year 2024 budget to connect Lake Pleasant Parkway to the proposed airport.

A draft of the city’s FY2025 budget, which Peoria leaders will adopt in the coming weeks, sets aside $4.8 million for the State Trust land purchase.

That $4.8 million, Faust said, represents the estimated costs associated with the initial purchase.

“Ultimately, we only planned for down payments and other things,” he said, adding, “At the end of the day, these things are auctions and so you have to be a successful bidder at auction.”

In a scenario where the city doesn’t win a bid for 500 acres, Faust said the city is always going to be seeking land and opportunities to create the economic engine that will drive the Innovation Core.

What’s next for Peoria’s plan?

The city will host a pair of open houses for the public to learn about the 2040 General Plan updates this month.

The first one is scheduled for April 23, from 6-7 p.m. at the Rio Vista Recreation Center, 8866 W. Thunderbird Road.

The second open house on April 25 at 6 p.m. will be held virtually via Microsoft Teams. The link, password and other info for the meeting can be found on the Peoria Planning & Zoning calendar at peoriaaz.gov/planning.

Following the open houses, the city’s Planning & Zoning Commission will meet throughout the summer to discuss the General Plan. The Peoria City Council is expected to approve the updates by mid-September.