The Arizona Land Department failed to prepare long-range plans to guide its sales of nearly 50,000 acres since 2016, even though state law requires it to, a state audit found.
The department's failure to properly plan for its land sales increases the risk that the sales won't provide maximum revenue for public schools, which top the list of beneficiaries for which the state land is legally held in trust, the State Auditor General's recent report concluded.
The lack of long-range planning also increases risks that the land sold won't achieve its "highest and best use," as required, and that the sales will more likely lead to "disorderly growth and development," once the lands are privately owned, the report said.
The department also lacks policies and procedures to determine whether to sell state trust land at its commissioner’s initiative, as opposed to following the guidance of a plan or selling in response to a request made by an individual prospective buyer, the audit said.
In fact, the audit found that single-bidder auctions have been the order of the day for the department, with 71% of 91 auctions over eight years drawing only one party to bid on the land.
When only one bid is made on a state land parcel, "that means it’s likely generating less income for the trust" than if multiple parties bid, said Sandy Bahr, a Sierra Club leader who has long pushed to overhaul what she sees as developer-friendly practices by the department.
"The whole idea behind having public auctions and bidding is that it will maximize the value for the trust — that’s one issue," said Bahr, director of the club's Grand Canyon chapter.
"The other issue is it’s pretty clear when developers and others go into the State Land Department and they have a proposal, a specific developer wants to do a specific project on state trust land, nine out of 10 times that’s the one that gets it," she said. "It’s not the way the system was intended to work."
This is a screenshot of an aerial photo of the 160 acres the State Land Department proposes to sell at auction near the Copper World mine site in the Santa Rita Mountains south of Tucson. The 160 acres is marked off inside a black square in the photo, which was included in a department-commissioned appraisal of the property.
In response to the audit, Land Department officials said they agreed with the key finding that the legally required plans hadn't been prepared. But they didn't agree with the conclusion that failure was "risking difficulties demonstrating state trust land sales were transparent and in trust beneficiaries’ interest."
They agreed to carry out three of the four recommendations from the Auditor General's office to begin preparing these long-range plans and making use of their findings. But the department said it would carry out the recommendations in a different manner than the auditor general prescribed.
Fuel for Copper World critics
The audit is providing fuel for critics of a currently proposed land sale of 160 acres at the edge of the Santa Rita Mountains south of Tucson — a sale requested by Hudbay Minerals Inc. because it wants to use this state land for disposal of mine tailings for its planned Copper World mine.
The opposition group Save the Scenic Santa Ritas is arguing that this sale should not occur without a much broader, long-range land disposition plan in place for the state agency.
Under state law, the department is required to earn maximum revenues from its land to enhance the value of its trust that serves public schools and other beneficiaries, including the state's three public universities.
K-12 public schools are by far the largest beneficiary of the trust, with about 8 million of the 9.2 million acres of state trust land designated to benefit public education.
The land agency is required to achieve the "highest and best use" from sale of its lands. It's also supposed to "promote the orderly development of state trust lands in areas beneficial to the trust and prevent urban sprawl or leapfrog development on state trust land," the audit said.
But the audit concluded the department's current practices risk achieving the opposite effect on all three fronts. It cited the failure to prepare any long-range disposition plan for its land — plans that typically cover five years — as a key reason. The last such plan was prepared in 2011, the audit said.
Specifically, the audit said:
— From June 2016 through October 2024, the department sold 48,000 acres for nearly $2.6 billion total in 97 public auctions without a plan in place for systematically disposing of them.
Five of those sales, totaling 958 acres, took place in Pima County in the Tucson area. The overwhelming majority occurred in Maricopa County, in the Phoenix area, perennially one of the country's fastest growing metro areas, although some sales were held in 11 of Arizona's 15 counties.
— Only a single bidder participated in 69 — or 71% — of those auctions.
— The department's most recent 5-year plan for disposing of state lands, from May 2011, relied on several factors for determining when land could best be put up for sale. They included a land parcel's location, the market supply and demand, and available infrastructure.
Conversely, since that plan expired in May 2016, the department has generally determined whether to sell state trust land on a case-by-case, either by responding to land purchase applications from developers and other potential buyers, or by setting up a land sale through the initiative of the state land commissioner.
— When department officials were asked in November 2024 why they hadn't updated the land disposition plan since 2011, "the department reported it was unaware why the plan had not been updated, and we were unable to identify a documented reason for the department’s lack of a disposition plan," the audit said.
— The department lacks policies and procedures for creating and annually reviewing and updating the legally required long-range plan, which likely contributed to it not updating its May 2011 disposition plan.
The Auditor General's Office published the audit in July. The Star learned of it earlier this month from John Dougherty, Save the Scenic Santa Ritas' executive director. He said he happened to come across it online while conducting "standard background research" on the state's planned 160-acre land sale requested by Hudbay, and on land department regulations in general.
'Essentially landlocked'
Save the Scenic Santa Ritas is opposing the sale partly on the grounds that the state's appraisal of the 160 acres was way too low because it was based on the land's existing zoning for rural and residential uses and not for the tailings disposal, which the group says would be worth far more.
"The State Auditor General’s report raises questions whether ASLD (Arizona State Land Department) can legally auction any State Trust Land, including the 160 acres sought by Hudbay, because the department has failed since 2016 to maintain a list of state land that is ready to be potentially auctioned," Save the Scenic Santa Ritas said in a written statement.
"The land disposition list is required by statute, yet the department has been in violation since 2016. We urge Governor (Katie) Hobbs to suspend the planned auction of the 160 acres and order the department to come into compliance with state law.”
In an email to the Star, the Land Department's Lynn Cordova responded to the group's concerns that the appraisal of the 160 acres as being worth $993,000 grossly undervalued the parcel.
The department commissioned the appraisal of the land "as is," and it was reviewed by the department's appraisal staff and the agency's Board of Appeals, a five-member board that reviews appraisals to ensure the sale is for market value, said Cordova, the department's legislative policy administrator.
Explaining the department's decision to put the 169 acres up for auction, Cordova added in her email that Land Commissioner Robin Sahid "has determined it is in the best interest of the trust to sell the 160 acres. This land is surrounded by privately owned land, US Forest Service Land and the Santa Rita Experimental Range. This land is essentially landlocked."
Hudbay, asked to respond to environmentalists' concerns about the audit's implications for Copper World, provided a statement outlining its previously stated rationale for wanting to buy the state land.
"Hudbay’s Copper World project is pursuing the public auction of the 160-acre State Trust Land parcel for mitigation purposes. Acquiring this 160-acres will allow Copper World to significantly increase the buffer space" between another, already designated tailings management area and adjoining properties at the southern end of the Corona de Tucson subdivision, the company said.
"We have made this commitment to mitigate our impact on our neighbors and will continue to seek other opportunities," the company said.
Next steps
The Auditor General's Office recommended that the land department develop and implement:
— An updated 5-year disposition plan for all state trust land, as required by state law.
— Written policies and procedures for developing future disposition plans, including updating the plans as needed, along with policies and procedures for how the updated plans should be used, as required by law.
— Written policies, procedures, and/or guidance for selling state trust land at the land commissioner’s initiative.
Responding, the Land Department said it would implement three of the four recommendations in a different manner than the audit recommended. In some cases, it said it would pursue changes in state law.
For instance, the audit noted that the department's Urban Planning and Land Use Oversight Committee is legally supposed to advise the land agency on how to prepare both its land use plans and its land disposition plans. But the department has indicated it wants to get legislation passed to abolish that committee because its primary function is to help with the land use plans, which the state agency believes duplicates the function of municipal land use plans, the audit said.
The committee's five positions have all been vacant since 2018.
The department also said it won't carry out the audit's recommendation to develop policies guiding land sales made at the land commissioner's initiative because "this is not required by statute and may conflict with the judgment of the commissioner."
