Development is underway on an enormous stretch of desert southeast of Phoenix that has been under the microscope for nearly 20 years.
Builders have a plan to pipe water to the development’s first homes, but a long-term water solution has yet to be found if the vacant land is to one day grow into a massive community of up to 900,000 people. To put the sheer size of the area into perspective, it’s nearly as large as sprawling Mesa, Gilbert, Tempe and Chandler combined or about the equivalent of California’s entire San Fernando Valley.
The Pinal County land is in the shadow of the hulking Superstition Mountains, between Apache Junction and Florence.
Plans to build homes and businesses on much of the 275 square miles of state trust land now known as Superstition Vistas began in the early 2000s.
Leaders at the time touted how building master-planned communities could transform Apache Junction, a community that historically has been known for its rugged Western vistas, affordable housing and mobile home communities brimming with snowbirds each winter. Rather than letting a hodgepodge of suburban sprawl encroach on Apache Junction’s mountain views, this was billed as a chance for the city to land high-quality development, something like Phoenix’s Desert Ridge or Buckeye’s Verrado, leaders said.
Now, D.R. Horton and Brookfield Residential — the same homebuilders behind Buckeye’s massive Tartesso master-planned community west of the White Tank Mountains and Avondale’s Alamar master-planned community south of Interstate 10 — have partnered to develop the first corner of Superstition Vistas.
The two companies are working on separate plots of land that are about 400 acres each. Together they own some 2,800 acres — or nearly 5 square miles. The land falls within Apache Junction’s boundaries, which means the 10,000 homes expected to be built there will rely on the city’s water supply.But that water only serves the small slice of Superstition Vistas, the portion being developed within the city limits. Most of the two-decade-old plans fall outside of any city, in Pinal County, which is under even tighter water restrictions than neighboring Maricopa County.
Development of Superstition Vistas may have begun, but questions about water supplies loom over the desert landscape. Even Brookfield Residential executives cite the lack of water as a problem standing in the way of developing the remaining roughly 270 square miles of Superstition Vistas.
What to expect for next year’s opening
D.R. Horton and Brookfield each expect to open a master-planned community in 2023. The two communities are planned to start between Elliot and Ray roads to the north and south and Idaho and Meridian roads to the east and west. It’s near east Mesa’s popular Eastmark community, which Brookfield and DMB Associates Inc. developed. The two Superstition Vistas communities are expected to have:
- More than 10,000 homes at build-out, which could take up to 10 years.
- A 16-acre regional park developed in partnership with Apache Junction. It’s planned to include a lake, ramadas, basketball courts and dog parks.
- Five community parks between 14 and 18 acres each.
- More than 30 neighborhood parks of 1 acre each.
- 40 acres of commercial development.
- More than 20 acres for an elementary school.
- More than 70 acres for recreation and outdoor activities and 4 miles of hiking and exercise trails.
- 10 acres for a public safety facility, which could house a library or police and fire services.
First sliver gets water from Apache Junction. What about the rest?
Superstition Vistas development ideas have varied through the years, but one question has remained the same: Where will the water come from?
Unlike developed areas within Pinal County such as San Tan Valley or Casa Grande, this was raw desert. It wasn’t farmland, which means water was never piped into this area.
“Because none of that land was ever farmed, you have to get creative,” said Grady Gammage Jr., who played a large role years ago in setting expectations for the land.
“The first time I ever focused on this area of state land … (then-Stand Land Trust Commissioner) Mark Winkleman said, ‘We’re trying to figure out what we should do with this land,’ and pointed at a map,” Gammage recalled. “I thought: ‘Holy crap.'”
The Arizona State Land Department manages some 9 million acres of public land. It occasionally auctions off pieces of the land and gives the money to the state’s public schools.Gammage wrote a report in 2006 for Arizona State University’s Morrison Institute for Public Policy. In it, he laid out hopes for the land and how the State Land Department could manage to sell it.
“We came up with some out-of-the-box scenarios. We never really thought any of them would be adopted, but we hoped they would have some influence on the Land Department’s thinking,” he said.Among the projections and suggestions in the report:
- Superstition Vistas could have a population of 900,000 as soon as 2060. Gammage now believes that could be a little too bullish, but not “inconceivable.”
- Superstition Vistas will have to compete for the desert’s most valuable resource: water.
In the 16-year-old report, Gammage wrote that the mega-development would be well-positioned to compete for water, in part, because of its proximity to the Central Arizona Project canal system, which brings water from the Colorado River to the Phoenix area.
But in the ongoing drought, Colorado River cutbacks continue to tighten for Arizona.
Much of the growth in metro Phoenix’s far west end has relied on a mechanism that lets homebuilders pump groundwater from underneath the development and offset it by putting an equal amount of Colorado River water underground, sometimes dozens of miles away.
That mechanism was created in the 1990s and touted as a short-term fix for large developments, such as Anthem in north Phoenix. But it’s increasingly criticized as an unsustainable way to build massive developments.
“The dilemma is it’s still groundwater. You’re still mining a finite resource to fund urban growth,” Gammage said. “At the end of the day, that’s not a sustainable solution.”
While some areas in Pinal County have depended on that mechanism, state water officials have taken steps to curb the area’s dependency on finite groundwater.
Arizona Department of Water Resources officials in 2019 said the county does not have enough groundwater to support projected growth. The department announced last year that it wouldn’t sign off on any new Pinal County developments that relied on finite groundwater. Instead, builders would need to bring their own water, the department announced.
“The days of utilizing native groundwater for development in Pinal are over, it’s done,” Tom Buschatzke, director of the state’s Water Department, said at the time, according to department documents.
The push to develop
But the pressure to develop is there. The southeast Valley and Pinal County have undergone enormous growth since plans for Superstition Vistas first hit the drawing board.Suburban sprawl is replacing desert brush.And it’s happening quickly.
Unlike some proposed master-planned communities with big aspirations and little construction, the southeast Valley is seeing these types of developments fill up left and right.
Communities like Eastmark, Power Ranch and Cadence at Gateway have sprung up as population and jobs have boomed southeast of Phoenix. The area recently welcomed the massive, privately funded Bell Bank Park, which expects to attract 5.5 million visitors annually.
“This makes sense,” said Mark Stapp, executive director of the Master of Real Estate Development program at Arizona State University’s W.P. Carey School of Business. “Employment drives population. Population drives housing. This makes a tremendous amount of sense in that regard.”Stapp said this stage of development in Superstition Vistas is a different ballgame than other massive master-planned community proposals, such as Douglas Ranch in Buckeye, which faces significant challenges in finding an adequate, sustainable water supply. Buckeye leaders approved plans for Douglas Ranch 20 years ago, but the community has yet to secure all of the water it needs for its projected 300,000 residents. For the time being, the Superstition Vistas communities can depend on Apache Junction’s water supply. But developers looking to build out the rest of the sweeping desert land, which has not yet been auctioned, are likely to face tougher water challenges as state officials increasingly scrutinize the way Pinal County develops. Stapp estimates that level of build-out could take as much as 40 years.
But water aside, Stapp said Superstition Vistas has a lot of something developments west of the White Tank Mountains don’t: jobs.
“I’m not dissing on Douglas Ranch or anything else … out there, but there’s no employment,” he said. “There’s no there, there.”
A long road, and multiple auctions, to get here
Superstition Vistas could have broken ground much earlier if not for the Great Recession.
Roc Arnett, then-president of East Valley Partnership, is credited with naming Superstition Vistas in 2003. Before that, it was just “all that state trust land in Pinal County,” Gammage wrote in his 2006 report.
Leaders got to work on planning what it could look like. Gammage wrote his report. There was momentum, and about 1,000 acres went to auction in late 2006.
Las Vegas-based developer Jim Rhodes bought the 1,010 acres of the state trust land, a piece of Superstition Vistas then known as Lost Dutchman Heights, for $58.6 million and had an agreement to buy 7,000 acres more. Homes were expected to hit the market as soon as 2009.
Gammage recalls sitting in the auction with his client, Denver-based Actus Lease Lend. He didn’t know Rhodes, and couldn’t believe how many times Rhodes kept raising the price.
The Arizona Republic in 2006 reported that Rhodes and Gammage’s client raised the price a combined 117 times in a back-and-forth bidding war in front of a standing-room only crowd.
But that was just before the real-estate market tanked, when Rhodes’ funds dried up and he defaulted on much of the land. His deal to buy the next 7,000 acres died.
Superstition Vistas saw one setback after another. The State Land Department didn’t auction more of the land until 2020. That’s when D.R. Horton stepped in and purchased the 2,800 acres now under development.
2020 auction was controversial
Some developers at the time said the low price would hurt public schools, which rely on the money from state land auctions.
Texas-based D.R. Horton won the nearly 2,800-acre piece of the land, agreeing to pay $245.5 million. As D.R. Horton cast the winning bid, auction attendees noticed the company’s representatives sat alongside Brookfield representatives.
Brookfield Properties Development Senior Vice President Dea McDonald said his company, which was not one of the qualified bidders, has been working with officials for years to develop the vacant land.
Brookfield’s involvement leading up to the auction was scrutinized, as some homebuilders and lawmakers at the time said the auction seemed to be made for Brookfield. While the company was not a qualified bidder, it worked with the state land officials before the deal to structure its financing terms.McDonald said Brookfield was working with state land officials to “crack the code on breaking into these large, massive pieces of land.”He added, “The bargain was whoever won the (nearly 2,800-acre) bid would be responsible for developing infrastructure that the state could build onto it in smaller chunks.”
Brookfield and D.R. Horton agreed to split the land and the cost “50-50” in a joint venture, McDonald said. Reach reporter Joshua Bowling at email@example.com or 602-444-8138. Follow him on Twitter @MrJoshuaBowling.
SOURCE: Arizona Republic